The Inter Provincial Co-ordination Committee (IPCC) is likely to meet next month to discuss major issues on withholding taxes raised by provinces particularly Sindh government's concerns with respect to double payment of withholding tax. Sources told Business Recorder Wednesday that a meeting of the Inter Provincial Co-ordination Committee (IPCC) is scheduled to be held on December 9 under the chairmanship of Mian Riaz Hussain Pirzada, Minister for Inter Provincial Co-ordination in the Cabinet Block.
The issues to be discussed in the upcoming meeting include change in withholding tax law vide Finance act 2014. The issue has been raised by Sindh government. Another issue is the non-acceptance of Token Tax paid in Khyber Pakhtunkhawa by other provinces. The issue has been raised by government of Khyber Pakhtunkhawa. IPCC will also discuss limits for the increased Tax in respect of professional tax by Sindh.
Other agenda items of the IPCC meeting include reciprocal application of domestic tariff to streetlights of Local, Bodies and SCRAP tariff on the drinking water supply tube wells of Local Bodies a PHE Department (Government of Khyber Pakhtunkhawa) and grievances concerning Exuberant Hajj Charges, Inadequate Arrangements and Role of Hajj Tour Operators in Balochistan (Government of Balochistan).
The agenda will also cover non-payment of interest amount by Pakistan Steel Mills, Karachi-Reference PAC Directive on Para 43, 44, Page-77 of Audit Report for the year 2006-07 (Government of Punjab); situation Analysis of the Population Welfare Programme, Ministry of IPC; allocation of grant-in-aid 2013-14 & 2014-15 in favour of Public Sector Universities (PSUs) in Balochistan (Government of Balochistan); Power Generation Policy -2015, Ministry of IPC and oil and gas matters (Government of Sindh).
According to the Sindh government, Federal Board of Revenue (FBR), had made changes in Withholding Tax Laws through the Finance Act, 2014 and its recovery with effect from 1st July, 2014. At present, two types of advance tax/withholding tax are collected by the Excise, Taxation & Narcotics Department on behalf of Federal Board of Revenue (FBR) under Section 231B at the time of registration of new vehicles above 850 cc (one time tax) and collection of adjustable advance tax at the time of collection of annual motor vehicle tax, as per given schedule.
The changes in the collection of advance tax at the time of registration of vehicles will now also be collected at the time of each transfer of ownership of the (private) vehicles till 5 years from its date of registration. Further, now it will be collected at different rates from the filer of Income Tax Return and non filer of Income Tax Return from minimum Rs 10,000 to maximum of Rs 250,000. Similarly, at the time of collection of annual Motor Vehicle Tax two categories have been created by FBR ie filer and non-filer of Income Tax Return.
Provincial government argues that by going through all these changes made by FBR without consultation from Excise, Taxation & Narcotics Department who shall act as their "agent" to collect these taxes, the following are their apprehensions of the department: (i) major software changes have to be incorporated by the Department for incorporating the said changes which may require at least 30 days and that too will depend in future on uninterrupted internet services between two departments; (ii) the software company of the department may charge a heavy fee for implementing the said changes; (iii) to manage the filer and non-filer categories of old registered vehicles on the basis of CNIC may not be possible for the department, because of its previous data base was not designed on a CNIC basis; (iv) with the introduction of advance tax at the time of transfer of vehicle the recovery of Excise, Taxation & Narcotics Department will suffer badly as motoring public will prefer to ply their vehicles on open letters to avoid payment of extraordinary Withholding Tax imposed; (v) non-transfer of vehicles may create problems for law enforcement agencies in the identification of their actual owners; (vi) with the increase in advance tax at the time of payment of annual Motor Vehicle Tax the number of defaulters may increase resulting in loss of government revenue; and (vii) motoring public may prefer to register their vehicles in those provinces where the computerised system is not effective to avoid heavy taxes which may be a loss to Sindh government, they added.
Comments
Comments are closed.