FBR ready could reduce ST, corporate income tax rates

RECORDER REPORT

ISLAMABAD: Federal Board of Revenue (FBR) Member Inland Revenue Shahid Hussain Asad has said that the Federal Board of Revenue (FBR) is ready to bring down rates of sales tax and corporate income tax following broadening of the tax-base and documentation of economy which would be instrumental in generating additional revenue.

FBR Member Inland Revenue informed the Senate Standing Committee on Finance here on Wednesday, if the government achieves the desirable results of the broadening of the tax-base, the FBR can reduce the sales tax rate to facilitate the business and trade.

He said that at present the FBR will suffer massive revenue loss of Rs 40-45 billion in case the standard rate of the sales tax has been brought down from 16 to 15-14 percent. The government will bear a dint of Rs 40-45 billion if General Sales Tax (GST) rate reduced from existing 16 percent to 15 percent or below.

Responding to a query, FBR Member IR stated that if the government has political will, the tax machinery can successfully document the economy with political backing of the Parliament. If we are able to document the economy, both the rates of sales tax and income tax would be slashed in future.

However, there would only be two taxes in future i.e. sales tax and income tax. The government is gradually phasing out the federal excise duty and the FED would be complexly eliminated in the next 2-3 fiscals.

While debating extending tax net on income from all sources, there was hot debate on income from agriculture and it was decided to recommend the government to impose tax on income above taxable limit from all sources irrespective of any sectors.

Member Inland Revenues objected the proposal to register all the air travellers as income taxpayers with the argument that people travel for employment, education, business and religious purposes and they all cannot be registered as income taxpayers.