VAT regime: FBR to garner stakeholders' support

For full-fledged implementation of Value Added Tax (VAT), the Federal Board of Revenue (FBR) has planned to garner support of all stakeholders including industrial/business segments of the country.

The FBR will carry out Value Added Tax (VAT) assessment surveys of different industrial/business segments of the country under the reform plan.

Sources told Business Recorder here on Wednesday that the FBR has chalked out a roadmap for VAT implementation in the next 2-4 years.

According to the FBR, Value Added Tax regime (instead of general sales tax) needs to be gradually implemented within 2-4 years to enhance revenues, broaden the tax-base and assist in documentation of economy. The FBR has planned to fully implement the VAT regime for all business segments over the next 2-4 years.

According to the FBR, Member Inland Revenue (Operations) has been proposed to be focal steward for implementation of VAT regime.

It has been proposed that the Director General (DG) Input-Output Coefficient Organization (IOCO-IR) would be re-designated as DG IOCO and VAT Compliance-Functional lead for VAT implementation.

Under the plan, the Commissioner Broadening the Tax Base (BTB) at each Regional Tax Office/Large Taxpayer Unit be responsible for business level implementation whereas Assistant Commissioner of respective RTO/LTU for Value Chain Evaluation and VAT implementation.

The roadmap for VAT implementation further revealed that the VAT be progressively implemented across various segments commencing with Third Schedule (retail price items) products and gradually absorbing complex value chain products.

The FBR will also ensure enactment of the VAT related legislation, rules and regulations, if required.

Moreover, capacity building of FBR for absorption of VAT regime (including database dev and process automation) is also part of the plan.

The FBR will also finalize stages and complexities in each product value chain with time and resources for VAT assessment surveys of particular industrial/business segment.

The revenue potential for VAT of particular industrial segments would also be assessed by the FBR. The political considerations and support of business communities/industrialists would also be taken into consideration, they added.