KPRA says operating ‘Restaurant Invoice Monitoring System’ successfully

PESHAWAR: The Khyber Pakhtunkhwa Revenue Authority (KPRA) is successfully operating Restaurant Invoice Monitoring System (RIMS) and installed the software in 114 restaurants by the close of last financial year, said Annual Report 2020-21 of the authority.

The system enables KPRA to get access to real time data of restaurants’ sales and tax collecting ensuring complete transparency in tax collected by the restaurants from the consumers.

The system also empowers the tax payers to check their invoices through KPRA websites to make sure that the tax, they pay at a restaurant, has been duly deposited with the authority. KPRA, as part of incentives to the restaurants, reduced the tax rate from 8% to 5% in all those non-corporate restaurants where RIMS has already been installed, thereby, benefitting both the restaurants as well as the consumers.

The report said that the adjudicating officers of the authority, during the year 2020-21, passed 214 assessment orders and imposed penalty in 4016 cases of non/late filers creating tax demand of Rs 6,826 million.

Out of 214 assessment orders passed during the year, the tax payers, filed appeals in 111 cases with Collector (Appeals). Whereas, against the 4016 penalty orders on account of non-late filing, the taxpayers filed 287 appeals with Collector Appeals.

Collector Appeals is an independent appellate forum within the authority and ahs the mandate under section 81 of the Act to pass such order as he thinks fit, confirming, varying, altering, setting aside or annulling the decision or order appealed against. 398 taxpayers aggrieved by the order passed by the adjudicating officers of the authority, filed appealed with the Collector Appeals during financial year 2020-21. Besides, seven appeals were brought forward from the previous year. 371 appeals were decided during the period under report. 34 appeals were pending on 30th June 2021.

The KPRA was established under KP Finance Act, 2013, as a corporate body, with the mandate to collect and administer sales tax on services provided, supplied rendered, initiated, originated, executed, received, delivered or consumed in the province of Khyber Pakhtunkhwa. Collection of Infrastructure Development Cess (IDC) was entrusted to KPRA in 2019-20.

The Policy Making Council in the apex forum of the authority comprising of seven members with KP Chief Minister as chairman while Director General (DG) KPRA is performing the responsibility of Secretary.

The members are included ministers for finance, law, parliamentary affairs and excise & taxation. Other members are included Chief Secretary, Secretary Finance, Secretary Law & Parliamentary Affairs, Secretary ET&NC and four representatives nominated by the government from private sector.

The council is policy making body for the authority and formulates policy guidelines pertaining to tax administration, planning, reforms, budget and any other matter referred to it by the government. The policies formulated by the council are binding on the authority.

During the financial year 2020-21, the authority collected Rs 20.8 billion, achieving a growth of 22 percent in comparison to the FY 2019-20.

The reforms introduced by the provincial government for enhancing province own receipts are bringing fruitful results. The establishment of Regional Offices at Mardan, Abbottabad and Bannu followed by the introduction of reduced rates of sales tax on services on more than 20 taxable services, and implementation of Withholding Regulation, 2020, contributed to phenomenal growth on Sales Tax Collection despite the adverse impact of Covid-19.

Tax collection from Construction & Contractual Execution sector remained Rs 2.5 billion for FY 2020-21. Despite reduced tax rate, the tax collection during the FY 2020-21 from this sector remained at par with the previous year.

Similarly, tax collection from transportation services also showed impressive growth of 46 percent. In terms of revenue contribution, an additional sum of Rs 270 million was collected during FY 2020-21 from this sector.

Tax collection from Oil & Gas sector is mainly based on the activities carried out at oil fields located in the province. As compared to FY 2019-20 a major dip has been observed in revenue collection during FY 2020-21. The prime reason for this dip was that the major E&P companies restricted their activities mainly due to the unavailability of multinational companies due to Covid-19 impact. Despite less activity, the KPRA was able to collect a sum of Rs 1.2 billion from this sector.

Tax collections from sectors like hospitality and manpower supply services showed a decline in FY 2020-21 in comparison to FY 2019-20, mainly because of adverse effects of Covid-19 restrictions.

Copyright Business Recorder, 2022