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Budget 2013-14 proposals: LTUs, RTOs ordered to avoid giving new ST or FED exemptions

Indirect taxes budget for 2013-14 would focus on measures to introduce amendments in the Sales Tax Act, 1990 and Federal Excise Act, 2005 to check tax frauds and bogus sales tax refunds with no new zero-ratings or exemptions of sales tax and federal excise duty (FED) in next fiscal to avoid revenue loss.

Sources told Business Recorder here on Monday that the FBR has strictly directed the Chief Commissioners of Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) to avoid any proposal for giving new sales tax or FED exemptions in coming budget. Under broader parameters issued to the Chief Commissioners for budget preparation exercise, the Board has directed the field formations to avoid proposals having negative revenue implications. Instead of proposing new sales tax or FED exemptions, only revenue generation proposals be forwarded to the FBR, sources added.

According to the FBR''''s instructions to the field formations on ''''Budget 2013-14-proposals regarding sales tax and federal excise,'''' the proposals for the coming Budget for fiscal year (2013-14) relating to sales tax and federal excise, on the following broad parameters: Firstly, the budgetary proposals should be pro-revenue. Secondly, the proposals should focus on broadening the tax base instead of suggesting further exemptions/ zero-rating.

Thirdly, the amendments may be suggested in the Sales Tax Act, 1990, the Federal Excise Act, 2005, rules, procedures and notification issued thereunder with a view to achieve simplification, remove difficulties and anomalies, and to abolish any outdated/ obsolete provisions (wherever possible a draft proposed amendment/ procedure may be enclosed);

Fourthly, the FBR would specially welcome proposals for eliminating tax fraud, plugging loopholes if any, facilitating genuine taxpayers and making the procedures transparent.

Fifthly, the proposals should be made keeping in view the consequences for the other related trade groups which might be adversely affected by the proposed measure. The FBR has requested the RTOs/LTUs that the requisite proposals may be sent to the Board as soon as possible, preferably by March 30, 2013, FBR''''s instructions added.

The FBR had already issued direct taxes policy guidelines for the Chief Commissioners of Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) for finalisation of direct taxes budget proposals for 2013-14. Based on these guidelines the direct taxes proposals would be finalised for the next budget.

Copyright Business Recorder, 2013


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