ISLAMABAD, Feb 1: As part of the tax administration's restructuring plan, the Central Board of Revenue (CBR) has decided to merge most of the functions of sales tax and income tax departments.

An official sources told Dawn that formal decision to this effect had been taken in a Board-in-Council meeting recently, which was presided over by CBR Chairman Abdullah Yousuf and attended by all member of the board.

According to the official, it had been decided that except the enforcement of the tax matters all other functions of the ST and IT including audit, facilitation, registration, human resource management and returns filing will be merged.

Earlier, it was agreed with the World Bank that enforcement and audit functions of the two bodies would be carried out separately, while all other functions will be merged to avoid overlapping of functions.

With this merger, the Board-in-Council decided that there would be only two kind of taxes - domestic tax and customs duty. The domestic would include income tax, central excise duty and sales tax.

According to the official, 12 regional tax offices would be established where income tax and sales tax would be collected under the same roof with integration of functions. The World Bank has already approved a $102.9 million loan to support Pakistan's reform project of tax administration to be implemented in a period of five years.