Raza Kazmi
ISLAMABAD: Building further on its ongoing drive for digitization to facilitate the taxpayers, promote ease of doing business and reduce compliance costs, FBR achieved one more milestone by developing National Sales Tax Return. This important project is all set to be launched by Finance Minister, Shaukat Fayaz Tarin, on Friday at FBR (HQs), Islamabad.
This is by all means a watershed initiative towards automation, data integration and harmonization of taxes.
It is pertinent to mention that the National Sales Tax Return was developed after rigorous discussions with the provincial governments and their revenue authorities. The feedback from other stakeholders, including taxpayers and tax practitioners, was incorporated. This digital facility will simplify tax filing procedures and thereby save compliance costs. This has been one of the key recommendations of international agencies such as World Bank and IMF.
The National Sales Tax Return will minimize data entry, which will address the common issues of data and calculation errors. The system will automatically apportion input tax adjustment as well as tax payments across the sales tax authorities, eliminating the need for reconciliations and payment transfers. Through this system, officers of all the revenue authorities will be able to make better informed decision regarding matters of the taxpayers. It will enable tax collectors to improve revenue potential and tax compliance without audits. Another benefit of this system is that it will encourage harmonization of tax procedures, definitions and principles between the federal government and the provinces, which will promote national unity and ensure cohesion.
In Pakistan, sales tax on goods is collected by the FBR while sales tax on services is collected by each of the four provinces in their respective territory. Sales tax on services in the Federal Capital Territory in Islamabad is also collected by FBR, while Azad Jammu and Kashmir and Gilgit-Baltistan have their own tax authorities.
For this reason, taxpayers were required to file separate sales tax returns every month to each of the different collecting authorities where they conducted business, which was causing them hardship and increased compliance costs. For example, a telecommunication service provider operating throughout Pakistan had to file returns every month to FBR, Sindh Revenue Board, Punjab Revenue Authority,Khyber Pakhtunkhwa Revenue Authority, Baluchistan Revenue Authority, AJK Council Board of Revenue and Gilgit-Baltistan Revenue Authority. This was a very tedious and cumbersome task, which often led to errors and disputes.
Keeping the above in view, this milestone initiative is going to contribute significantly to not only maximizing revenue potential but also to eliminating the culture of fake/flying invoicing, suppression of sales and thereby ensure tax compliance across Pakistan.
Continuing on its relentless anti-smuggling drive, Pakistan Customs, FBR has seized contraband items (narcotics) valuing Rs. 1340 million in two separate actions which were being smuggled to Pakistan through Torkham.
In the first incident, Pakistan Customs confiscated contraband items containing Heroine weighing 35 Kgs and Methamphetamine (ice drugs) 17.4 Kgs valuing Rs. 550 million. Upon credible information, a Customs Vigilance Team was deployed to detect the suspected vehicle. A suspected vehicle arrived at Torkham Customs Station and remained parked. The Vigilance Team waited for handlers to arrive, however, no one approached the vehicle. The Customs took control of the vehicle and drove it to Peshawar (39 Km from Torkham). The fuel tank was cut open and found that half of the tank was separately welded for concealment of narcotics.
Similarly, in another action, Pakistan Customs seized a huge cache of 113 heroine powder bags weighing 80 KGs and valuing Rs. 790 million at Torkham. The vehicle carrying smuggled item was flagged suspicious by the staff of Appraisement collectorate. During thorough examination, concealed cavities were discovered in the fuel tank and frame of the vehicle, which were cleverly welded. The cavities were cut opened and huge cache of narcotics (heroine powder) was recovered. Drivers of the vehicles have been arrested and FIR has been lodged in both cases. Further investigation on the matters are under way.
It is pertinent to mention that Federal Board of Revenue is following a policy of zero tolerance against smuggling and thereby has increased vigilance and surveillance of cargo movement across the border.
Finance Minister, Shaukat Tarin, has commended FBR for its successful anti-smuggling drive across Pakistan. Likewise, Chairman FBR/Secretary Revenue Division, Dr.Muhammad Ashfaq Ahmed has appreciated Member Customs (Ops) FBR, Syed Muhammad Tariq Huda, in ensuring zero tolerance against smuggling of all shades and grades. He has announced cash awards and merit certificates for the Customs Team posted at Torkham on conducting two back to back successful operations. He further reiterated his unflinching resolve to fight the menace of smuggling across the country in order to maximize tax compliance.