KP Sales Tax on Services Act: Attachment of accounts sans show-cause proposed

LAHORE: The Khyber Pakhtunkhwa (KP) Sales Tax on Services Act, 2022, has proposed attachment of bank accounts upon short-payment or un-paid tax without show-cause notice, said noted taxonomist Ashfaq Tola.

However, he added, prior approval of the Management Committee and Collector shall be needed under the amended law.

According to him, the Khyber Pakhtunkhwa Finance Bill, 2024 for the Fiscal Year 2024-2025 has been tabled before the KP Assembly on 27.05.2024.

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While analysing the amendments made to the Act, Tola pointed out that the amended law has proposed the attachment of bank accounts upon short-payment or un-paid tax without show-cause notice. However, prior approval of the Management Committee and Collector shall be needed.

Also, he said reward has been proposed to whistle-blowers for reporting concealment or evasion of tax, tax fraud, corruption, or misconduct by officers, or officials of the Authority.

He said the amended laws has also suggested fixed rate of sales tax for Customs Agents at a fixed rate of Rs3,000/- per goods declaration.

According to him, practitioners, professionals, consultants, advisors of legal profession or field shall deposit a fixed sales tax of Rs500/- at the time of filing of each case, appeal or petition.

He said the management services including fund and asset management services would be subject to sales tax on services at 15%.

Tola pointed out that the Bill has proposed to include “failure to declare and pay tax chargeable” within the scope/ definition of Tax Fraud, subject to certain conditions.

The Policy has proposed to insert the procedure of collection of tax from Collection Agents whereby the Policy Board has been empowered to declare any other person or class of persons as collection agent, even if they are not a service provider or a service recipient in a particular transaction.

Moreover, such persons would be required to collect full or part of tax charged from another person or class, and deposit it to the government treasury within a stipulated time and such manner, as prescribed in the notification by the Policy Board. The special procedure, so prescribed, may also provide for registration, bookkeeping, invoicing or billing requirements, returns and other related matters in respect of any service or class of services. Furthermore, the Bill also proposed that, if a tax collector fails to collect or deposit the tax, they’ll be personally responsible for paying the tax to the government.

Copyright Business Recorder, 2024