RAWALPINDI, Dec 15: Central Board of Revenue (CBR) Chairman Abdullah Yousaf on Wednesday said the current 15 per cent sales tax was higher compared to other countries and there was a need to review it.
He was speaking at a function organized by the Rawalpindi Chamber of Commerce and Industry (RCCI). The Economic Policy Review Task Force is considering the issue and its recommendations would be implemented.
Mr Yousaf said the sales tax rate in other countries was lower than that of Pakistan and Bangladesh. He said an electronic system would be introduced next year to ensure uniformity of valuation for imported goods and a speedy clearance at customs offices.
The role of customs intelligence will also be reviewed, he added. The CBR chairman underlined the importance of internal audit saying it would remain an integral part of the universal self- assessment scheme to make revenue generation more transparent.
Noting the complaints of harassment from tax officials, Mr Abdullah said the CBR had suspended field audit for a period of six months with a view to providing relief to taxpayers.
Internal audit, he said, randomly selected 3.5 per cent of return forms and verified their authenticity through a central computerized database. He said traders with less than Rs5 million turnover were being de registered after they submitted their tax returns for the given period. A project, he said, was underway through which tax returns would be obtained from the CBR website.
This process will simplify and streamline the procedures and raise efficiency. Discrepancies in corporate sector taxation will be removed to create a level-playing field for companies and business concerns, he said.
He agreed with the RCCI representatives that the system of tax refund was inadequate and had room for improvement to address the needs of taxpayers. The CBR chief said the board had initiated a pilot project based on 'No tax no refund' system for the top 200 companies in the textile sector to get rid of complicated procedures.
A draft plan has also been circulated among stakeholders aimed at simplifying tax refund rules and expediting process of cases. He said the CBR was quite open on the issue of charging of compound amount on the principal sum and wanted to settle appeals and judicial cases through out-of-court settlement. He said the board would not resort to unnecessary record-keeping.
To a question, he said the CBR had lifted ban on import of old and used vehicle parts to discourage smuggling. The government realizes that smuggling could be controlled through fiscal measures instead of administrative steps.
