Top tax experts have proposed collection of fixed sale tax on petroleum products to minimise its inflationary impact in view of rising oil prices in the international market.
The proposal was primarily floated by Ashfaq Yousaf Tola, FCA, tax specialist during the meeting of the Core Advisory Group of Quomi Welfare Foundation on "Taxation Reforms in Pakistan," presided over by the former FBR Chairman Abdullah Yousaf and attended among others by former Economic Advisor, Ministry of Finance, Sakib Sherani and Abrar Ahmed, FBR Former Member RGST.
The Core Group accepted the viable proposal of the leading Karachi-based tax expert which will be forwarded to the government for consideration. The meeting decided to send the proposal of fixed sale tax on petroleum products along with other budget-related proposals to the government to incorporate them in budget 2011-12. The meeting proposed that the government may fix sales tax on petroleum and gas products on per liter and per mmbtu basis, respectively, because it would help curb inflationary impact of any increase in the international prices of petroleum products.
Khawar Khursheed Butt, Member, FBR, Choudhary Imtiaz Ahmed Ranjha, Executive Director, QWF, Bushra Siddiqui, Manager Program & Finance, QWF, Dr Christian Lorenz, Head of Tax Reforms, GIZ and Madiha Ahmed, Manager Program, DFID also attended the meeting. Ashfaq Yousaf Tola, FCA, tax specialist gave a presentation on the state of economy, addition revenue generation and budget proposals.
In order to increase the tax base and encourage transparency, the meeting recommended that the government should vigorously pursue the policy of automation by the introduction and implementation of the concept of data warehouse, integrated tax management system and automated system of audit.
The Core Group was of the view that the biggest source of corruption and misuse of power is smuggling under Afghan Transit Trade, which not only deprived the government of legitimate earning but also was one of the reasons for inflationary impact. The meeting recommended to the government to curb the menace of smuggling under the guise of Afghan Transit Trade by revisiting the procedural part, especially installation of tracker on container along with vehicles.
The members' view was that the government should rationalise the tariff on the basis of cascading that is raw material, semi-finished and finished goods, besides doing away with regulatory duty. The meeting started with the presentation by Ashfaq Tola, suggesting various means of increasing tax revenue while Abrar Ahmed, former FBR member on RGST also submitted his proposal for improving economy and tax revenue of Pakistan. The Core Group was of the view that there was need to improve the overall efficiency of the Federal Board of Revenue and constituted a group to finalise tax proposals for agriculture sector as well.