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LAHORE: Harmonization of sales tax between the federation and provinces has become a distant dream as the provincial sales tax on services is in perpetual throes of uncertainty and not able to get a foothold in the already week tax system of the country, said sources in the provincial tax administration.

They said the general acceptability level by the businesses has been on the low because of its newness. Moreover, they added, the escape route has been provided by the FBR’s strange animosity towards this tax. Whenever the provincial authorities tried to get a firm grip over the untapped service tax bases, the FBR comes up with a strange show of uncanny administrative and legal overtures to thwart such moves. Rather than supporting the system, the FBR always has thought of an adversarial relationship between them and the provincial revenue authorities.

One source confided to this scribe that the people at the policy level in the FBR are of the view that because of the support of the huge and very strong provincial administrative set-ups, the provincial revenue authorities may outpace the FBR in innovation, robust tax system, and growth rate.

It may be noted that the ministry of finance has set up a joint committee in between the federation and the provinces to resolve the disputes towards harmonization of sales tax, and a number of meetings have already taken place on the issue without a tangible result.

Meanwhile, the FBR sources said things are not in the right place at the provincial level too as almost all the provincial revenue authorities are running purely on an ad hoc basis. Apart from Sindh Revenue Board (SRB), they said all other revenue authorities are without a permanent head and are being run by the junior officers of FBR who lack decision-making because of the lack of clarity. This also adds to the factor that they are part of a borrowed workforce from FBR who all the time remains under the influence of their seniors from FBR. They are also not sure about their continuity in the provincial authorities as they are at the mercy of FBR’s repatriation call.

The sources further added that provincial finance departments are not bothered to empower these authorities due to the reasons best known to them. For them, the achievement of the yearly revenue target is all they need and they are not cognizant of the fact that due to the infirm legislations in place and structural deficiencies they are losing double of what they are achieving at the moment.

The SRB perhaps is in a better position in this regard as they are fully autonomous and that’s the reason that they have performed well as compared to others in matters of having a strong human resource (HR) structure. Perhaps this is the high time that other RAs should be structured in a similar fashion to give them a bigger playing field where they need not look towards finance departments even in day to day affairs, the sources added.

Copyright Business Recorder, 2021


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