ISLAMABAD, Jan 24: Pakistan will provide technical assistance to Afghanistan in the drafting of income tax law, training of tax officials and development of software for issuance of tax identification number (TIN) to the taxpayers.
Member direct taxes, Vakil Ahmed Khan told Dawn on Saturday that offers of assistance/help in these and other areas were made following the request of the Afghan government authorities during a recent visit to Kabul.
The member direct taxes led a high level fact finding mission to Kabul for detailed discussions with their Afghan counterparts and finalize recommendations. They met the Afghan finance minister, Dr. Ashraf Ghani, head of Afghan General Presidency of Revenue(GPR), Anwar Taimuri, and director general taxation and director, Large Taxpayer Office (LTO), Thomas Story and revenue advisors.
Mr Khan said that as the request by the Afghan government Pakistani tax officials will provide technical assistant to Afghan tax officials in drafting their income tax law. The existing tax laws lack provisions for self-assessment principles, taxation ruling, tax evasion measures and appeal mechanism.
Currently, an income tax law as it is practised in countries like Pakistan does not exist in Afghanistan.
Kabul has, however, established a Large Taxpayer Office (LTO) to deal with seemingly non-existent big taxpayers, which was scheduled to start functioning in February 2004.
For this purpose, the member said the Afghan government has started issuance of tax identification number (TIN) to taxpayers. So far around 700 taxpayers were issued TINs.
To further facilitate and speed up the process, officials of Pakistan Revenue Automation Limited (PRAL) will soon visit Kabul to help them in establishing a software for issuance of national tax number and processing of information.
It would be followed by a visit to Islamabad of a group of officials from Afghan revenue department in June 2004 to examine withholding tax regime presently operating in Pakistan.
Similarly, the member said that a delegation of Afghan tax officials expected in March would be given training in the fields of self-assessment scheme, tax administration and audit procedures. The training would be provided in Pushto language.
According to the member, all expenditure on the training facilities will be borne by Pakistan government.The Afghan tax management teams would also visit Pakistan by end of the current year to examine medium and small taxpayers administration in Pakistan.
He said Pakistan would provide assistance in the establishment of medium and small taxpayers units as well in Afghanistan.
Mr Khan said that the Afghan revenue department would be assisted in complete automation of their taxation system.
Currently, fixed income tax rates are applied in Afghanistan as there was no concept of assessment, audit, etc.