LAHORE: The Punjab government has brought several new services under Punjab sales tax net at a rate of 16 percent and most of these services related to largely unregulated and undocumented sectors concerning small businesses.
All these services were brought under the tax net for the first time, therefore, their compliance on field entailed resistance from trade bodies and business associations concerned, at time leading to occasional street agitation.
Punjab Revenue Authority (PRA) Member (Operations) Raza Munawar disclosed this in a media briefing on behalf of the PRA Chairman here.
He added that the authority held detailed meetings with a number of associations and respective trade bodies from time to time including representatives of dry cleaners, gyms, property dealers (real estate agents), tour operators and travel agents, automobile dealers, constructors association etc. The main demand of these representative associations and trade bodies, he said, had been for reduction of Punjab sales tax rate to alleviate hardships on small businesses.
Punjab Revenue Authority examined the demand of the representative associations and advised the government that a reduced rate scheme (without any input adjustment) may be viable for improving compliance in otherwise unregulated sectors, he maintained.
Raza Munawar said that in the Resource Mobilization Committee (RMC) meetings held in March and April 2015, the PRA brought a proposal to reduce the rate of sales tax for certain small stand-alone and non-corporate businesses with a view to ensure smooth transition from traditional delinquency to voluntary compliance, to extract tax from services which had not contributed anything in the past and to help develop a useful database for future policy formulation including upward review of the reduced tax rate.
