ISLAMABAD: The Sindh Revenue Board (SRB) has conveyed to the Federal Board of Revenue (FBR) that the projected claim of loss of federal sales tax of Rs1 trillion on account of domestic transactions on the four service sectors appears to be untrue. According to a letter received at the FBR's Headquarters from the SRB, Tuesday, the FBR collected total sales tax of Rs1.596 trillion during the financial year 2019-20, of which Rs0.876 trillion was sales tax on imports and 0.720 trillion was sales on domestic transactions (Source: FBR Year Book 2019-20).
That being the case, the projected claim of loss of federal sales tax of Rs1 trillion on account of domestic transactions on the four specified service sectors (namely restaurants, transportation of petroleum products, toll manufacturing for others and construction) appears to be untrue, and a mere conjecture of utter confusion.
Addressing the chairman FBR, the SRB stated that in case the FBR has any study conducted to corroborate the said statement of loss of Rs1 trillion in sales tax revenue, such study may kindly also be shared with the SRB and other Provincial Sales Tax Administrations.
"Kindly appreciate that such misleading statements in the press heighten the concerns in the minds of public, in general, and the economists, in particular who follow the revenue collection and economic trends. It also escalates the issue beyond its real proportions, besides quite needlessly giving the impression of something seriously amiss between the provinces and the FBR, on the harmonization issue, to the detriment of the efforts underway to resolve them," the SRB stated.
The SRB has requested the chairman FBR to consider issuing a public/press statement depicting the true picture without undermining the achievements of the Provincial Revenue Authorities in the administration and collection of sales tax on services, as mandated by the respective Provincial Legislatures. The SRB's top officials renew and reiterate the SRB's full support and cooperation to the FBR and the National Tax Council in relation to amicable resolution of the outstanding issues in the interest of taxpayers' facilitation, the SRB added.
Copyright Business Recorder, 2021
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