Combining ST, income tax, excise laws: FBR to engage consultants to conduct international study

The Federal Board of Revenue (FBR) has decided to hire consultancy services for conducting an international study on the proposed 'Inland Revenue Act' to combine sales tax, federal excise and income tax laws into a single law.
Sources told Business Recorder here on Monday that FBR Member (Legal) apprised the Board that on creation of Inland Revenue Services (IRS), its offices are required to handle three laws--Income Tax Ordinance 2001, Sales Tax Act 1990 and the Federal Excise Act 2005. He proposed that major portions of these laws are common and replication. Therefore, these laws may be condensed into a single composite law having the common provisions mentioned in one part and dedicated chapters for the uncommon parts for each law.
The proposal was discussed in detail and it was decided that before a decision on this proposal, a study of the international experience in this regard would be more appropriate. Therefore, the Director-General of Strategic Planning and Statistics was assigned to carry out research and apprise the Board in its next meeting about the international experience on the subject.
The Board has already constituted a committee to draft the 'Inland Revenue Act' to combine Sales Tax Act, 1990, Federal Excise Act 2005 and Income Tax Ordinance 2001 into a single unified law for uniform application of penalty regime and other provisions under a single law. The FBR has constituted a committee, headed by FBR Member Legal, for drafting of the 'Inland Revenue Act'. However, some senior sales tax officials objected that the sales tax laws and direct taxes laws remained separate under the best tax administrations.
The Board is planning to introduce the 'Inland Revenue Act' following harmonisation and integration of taxes under the reform process. The "Inland Revenue Act" would simultaneously deal with sales tax, income tax and federal excise.
A simplified combined law would further facilitate the business community for which the FBR is planning to draft the 'Inland Revenue Act'. Therefore, a single Act would deal with all the taxes under the harmonisation of taxes exercise. The further synchronisation of income tax and sales tax would be required under the revamped tax machinery.