LAHORE: The Punjab Revenue Authority (PRA) taxpayers’ number has crossed 100,000 within nine years of its transfer from the Federal Board of Revenue (FBR) after the 18th amendment.

This number of taxpayers was merely 2,357 in 2012 when the FBR had transferred the collection of sales tax on services to the province after showing a collection of Rs 22 billion against 12 services. The number of taxpayers was 94,600 in June 2021 who had paid Rs 143.75 billion sales tax against 70 services.

Chairman Punjab Revenue Authority (PRA) Zain-Ul-Abidin Sahi shared this data with the Business Recorder in an exclusive interview on Tuesday. He pointed out that the PRA had collected Rs 33.9 billion against 21 services from 4,983 taxpayers in 2013 after coming into being under the PRA Act, 2012.

When asked about the growth potential in future, Abidin said it was difficult to project in the absence of a clear-cut calculation of gross domestic production (GDP) of the province. “Since we do not tax government services, wholesale and retail services, rented properties and passenger buses etc, therefore, it is difficult to make a tangible prediction,” he added.

According to him, the PRA has recently signed a Memorandum of Understanding (MoU) with Mahboob-ul-Haq Research Centre to engage a team of researchers from top international universities including Harvard University, Columbia University, London School of Economics, and Lahore University of Management Sciences (LUMS) to identify gaps in tax policy and administration to help PRA achieve its true potential.

The Centre would also evaluate the Electronic Invoice Monitoring System (EIMS) and devise a human resource strategy for the organization free of cost, he said. He said the PRA has been dealing with issues like litigation, upgrading of Restaurant Invoice Monitoring System (RIMS) with EIMS with a skeleton human resource of less than 400 in total. He has appreciated his team and the staff at the level of Commissionerates.

To minimize the compliance gap, Abidin said, some 350 workshops have been organized over the last one and a half years besides providing guidance to 2,689 individual taxpayers on how to respond tax notices. A pictorial ‘users’ guide’ has also been displayed on the website to improve the comprehension of taxpayers.

On the policy side, he said, the rate of sales tax has been reduced to 5 percent on 35 services while withdrawing the facility of input adjustment from small-scale taxpayers. Similarly, he said, tax rate has been reduced to 5 percent on payment through credit cards in restaurants while keeping it 16 percent against cash payment. It has given rise to the demand for credit card machines at restaurants.

However, the facility of input tax adjustment has been extended to multinational fast food chains against a written application to revise their tax to 16 percent against payment through credit cards, he explained, adding that no other provincial tax authority could achieve revenue growth like PRA in result of this strategy. He said expansion of Commissionerates is also under progress to enlarge tax base in the province.

Copyright Business Recorder, 2022


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