Major items import: New tariff regime from December

KARACHI: The government will introduce new tariff regime, for major import items, by December, 2011, said Salman Siddiq, chairman of the Federal Board of Revenue (FBR).

Presiding over taxpayers' interaction seminar, conducted by Facilitation and Taxpayer Education Wing of FBR, held at Federation House, he said the government has planned to rationalise the tariffs of 10 major import items, including tiles, cigarettes, crockery, etc, with the aim to provide level playing field to the industry, and discourage illegal trade in the country. He said that the taxation machinery is at present in transitional phase and the authorities concerned have taken business community on board to make it flawless.

Replying to questions raised by Khalid Tawaab, SM Munir, Tariq Saeed, Engr Jabbar, Arif Habib, Qadir Memon and others, he said the decision to impose 15 percent surcharge, which would be implemented across the board, was aimed at providing financial support to the flood victims, and added that nobody would be allowed to escape from the said liability.

He said the problems related to Form-D and Form-F of income tax and sales tax respectively would be addressed in the meeting on Friday.

Salman also assured the business community of gradually eliminating multiple taxation system, saying that the government has a vision that the tax system needs to be simple and for the purpose the revenue body is striving to move away from multiple tax regimes and retain just three main taxes - income tax, sales tax and custom duties. He termed the reduction in the rate of sales tax to 5 percent as a hard decision, saying that the same could not be materialised till the broadening of tax net.

He dispelled the impression that International Monetary Fund (IMF) had pressurised the board for the implementation of value-added tax (VAT), saying that the government had on its own offered to come into VAT.

He said that self-assessment scheme would continue, with effective audit, and urged the business fraternity to draft medium-term budget for the board.

The FBR chief said that around 60 percent revenue collection is made through WHT mode but the withholding agents are still not depositing the WHT into national kitty despite charging the same from its consumers.

He said the department after WHT monitoring detected Rs. 3.75 billion discrepancies in the ledgers of financial institutions.

Moreover, he informed the participates of the seminar that the revenue body is taking stiff measures to eliminate man-to-man interaction in tax departments and termed it as one of the root causes for corruption in public entities.

He said the board with the assistance of all concerned agencies including Nadra, PRAL, banks, etc has established data warehouse for online access to the information.

He said that the board, through this information sharing, has already identified 2.3 million potential taxpayers. Of them, 24,000 taxpayers have deposited Rs 367 million in the national exchequer against their tax returns while some 0.12 million notices have also been issued in this regard.

Salman said he has optimistic views about FBR reforms that the board has a clear timeline to address the problems within stipulated period.

He said it has neither been decided to go fully with PaCCS nor WeBOC as the WeBOC is in evaluation phase, and added that the authority concerned is making all-out efforts to make WeBOC compatible with PaCCS but the process would take time. A large number of people belonging to every sector were present on the seminar.