The Federal Board of Revenue (FBR) has decided to merge the income tax, sales tax and federal excise groups into one group ie Inland Revenue Service to provide state of the art tax-related services under one roof and customs would also be renamed as Pakistan Customs Services.
Sources told Business Recorder on Thursday that the board-in-council meeting in August would approve Inland Revenue Service and Pakistan Customs Services. Once the council gives approval, the new revenue streams would be officially notified within one month.
In this connection, the FBR has issued instructions to the Human Resource Management (HRM) Wing to integrate income tax, sales tax and federal excise groups as per strategy paper agreed with the World Bank. A working paper is being prepared by the concerned department to give final touches to the implementation of this major change in the FBR administration.
When asked about the rationale to merge income tax with sales tax, sources said that Inland Revenue Service would handle the revenue collection operations pertaining to sales tax, income tax and excise. However, Customs Group would be renamed as Pakistan Customs Services to exclusively cover customs officials.
The co-location of taxes has been done through creation of Regional Tax Offices (RTOs) where all taxes except customs are being handled at one place.
Following this change, it would be easier for the taxpayers to deal with all taxes using one system instead of moving from income tax officials to sales tax officials for day to day operations.
Sources said that integration of income tax and sales tax would not affect the seniority and promotions of the FBR officials. The promotion policy would continue to remain the same for sales tax and excise officials without disturbing the existing system.If the promotion of a sales tax official is due, it would not have any negative impact due to the presence of income tax officials within the same group. Similarly, the powers and functions of the sales tax and excise officials would remain the same under the Inland Revenue Service.
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