ISLAMABAD: The Federal Board of Revenue (FBR) will present the draft of the Inland Revenue Code to Finance Minister Miftah Ismail for approval before making it part of the next Finance Bill, 2022. Sources told Business Recorder here on Saturday that the FBR has held meetings on the drafting of the new Inland Revenue Code for the last two days to finalize the new law. However, on both days, the drafters of the new law discussed in detail each and every new provision.
The FBR intended to enforce a new harmonized and simplified Inland Revenue Code from July 1, 2022, combining Income Tax Ordinance, 2001, Sales Tax Act, 1990, Federal Excise, 2005, and the Islamabad Capital Territory (Sales Tax on Services) Ordinance, 2001.
According to sources, it depends on the new economic team to accept or reject the proposed law. The FBR team including experts is in the process of finalization of the new law to combine Income Tax Ordinance, 2001, Sales Tax Act, 1990, and Federal Excise, 2005 by July 1, 2022.
If the new government is not ready to implement the new Inland Revenue Code, the existing tax laws would continue beyond July 1, 2022
During the last two meetings, the clause by clause discussion continued on the simplification of the Inland Revenue Code, but it was a very complex process. Besides the combination of the Income Tax Ordinance, 2001, Sales Tax Act, 1990 and Federal Excise, 2005, the relevant rules are also required to be combined.
The harmonization and simplification of these laws would also change the languages of the Income Tax Ordinance, 2001, Sales Tax Act, 1990, and Federal Excise, 2005. Therefore, it is a complex process to redraft all laws or combine the same. It would also need more time for the stakeholders to understand the revised, combined, or simplified law.
Copyright Business Recorder, 2022