The ninth meeting of the Tax Reform Co-ordination Group (TRCG) would be convened at Karachi on Friday (today) to chalk out sales tax, income tax, federal excise duty (FED) and customs duty budget proposals for (2012-2013). Sources told Business Recorder here on Thursday that meeting of the TRCG would be held at the Large Taxpayer Unit (LTU) Karachi to discuss taxation proposals for next fiscal (2012-2013).
The TRCG members would submit their budgetary proposals for consideration of the Federal Board of Revenue (FBR) and Ministry of Finance. According to the agenda of the meeting, the TRCG would discuss FBR's revenue collection update; discussion on the capital gain tax (CGT) on stock exchanges and thirdly budget proposals for fiscal 2012-2013 regarding customs duty, income tax, sales tax and FED.
The budget proposals would be discussed under the broader guideline of the government on the new budget. The TRCG has recommended that the tax base be broadened, documentation increased and gradual shift away from presumptive tax regime with increase in rate for presumptive tax regime towards eventual reduction in tax rate under normal tax regime.
The guiding principles of the forthcoming Federal Budget should be continuation in the taxes simplification approach, avoidance of increase in taxes or their rates, fiscal incentives for growth along with investment and employment generation, sources said. According to the sources, FBR team of tax managers headed by FBR Chairman Mumtaz Haider Rizvi would also attend the meeting at the LTU Karachi.
After a series of meetings between the FBR and the SECP at the FBR House on the issue of CGT on stock exchanges, the final proposals would be discussed at the TRCG meeting at Karachi. The possibility of introducing a new eighth schedule in the Income Tax Ordinance 2001 through a Presidential Ordinance to cover all CGT related issues would also be discussed. The proposed minimum holding period of 120 days for investment made in stock market would also come under discussion.
In this regard, the "Implementation Group" headed by Shahid Hussain Asad FBR Member Inland Revenue, comprising TRCG members, FBR officials and SECP representatives, would give recommendations on the proposed changes in the revised CGT regime. Prime Minister Syed Yusuf Raza Gilani and Advisor to the Prime Minister on Finance Dr Hafeez Shaikh have already said that no new tax would be imposed in the coming budget and rates of existing tax would not be increased. The government is committed to bring potential persons, who are not paying tax into the tax net.
The meeting is expected to be attended by Deputy Chairman Planning Commission, Dr Nadeem-ul-Haq; Chairman, SECP Muhammad Ali; Tax Reform Core Group Members Abdullah Yusuf, Arshad Zuberi, Shabbar Zaidi, Ashfaq Tola, Ali Jameel Yousuf and Mohammad Arshad Chaudhry.
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