The Federal Board of Revenue (FBR) and Sindh Revenue Board (SRB) have developed consensus to submit revised figures of input tax adjustments for data matching so that a mutually agreed figures be finalised on payments of adjusted amounts by both the sides. Sources told Business Recorder here on Thursday that a meeting was held between the SRB team and FBR at the FBR House which was chaired by Special Assistant to PM on Revenue Haroon Akhtar.
There was a major breakthrough in resolving the issue where both the sides agreed to actively engage in data matching pertaining to the input tax adjustments. Both the sides have showed commitment to mutually resolve the issue so that the input tax adjustment be restored for provincial services. Haroon Akhtar is playing a lead role in resolving the lingering issue between federation and Sindh government through a mutually agreed mechanism on proper reconciliation of data and figures pertaining to the tax adjustments.
In this regard, things moved in positive direction at the meeting held on Thursday at the FBR House. It has been observed that the base of data of both the FBR and SRB is the same ie Pakistan Revenue Automation Limited (PRAL). The data has been originating from the same base ie PRAL. Therefore, there should not be any discrepancy in the data matching between the FBR and the SRB figures.
Both the sides noted that the data of FBR as well as SRB has been maintained by the same agency ie PRAL. Thus, any discrepancy must be resolved through data matching exercise. It has also been discussed that there seems to be some misunderstanding or miscommunication between both the sides. It has been mutually agreed that both the SBR and FBR will be engaged in formal data matching. Major progress in this regard has been witnessed that the FBR and the entire SRB team understood the viewpoint of each other.
On the conclusion of meeting, both the sides have been agreed on the basic principals of data matching. The FBR and the SRB will share the data next week pertaining to the tax adjustments for reaching consensus on a mutually agreed figure.
The meeting is part of the ongoing negotiations between Haroon Akhtar and SRB for the settlement of issue of input tax adjustment Recently, Special Assistant to Prime Minister on Revenue went to the office of SRB at Karachi and met its Chairman and advisor to discuss key issues including reconciliation of input tax adjustments data, disallowance of input tax adjustment against provincial services and other related issues.
According to sources, both the sides have moved in positive direction and more developments are expected next week following data matching by both the sides. In the past, the FBR has not agreed with the figures of SRB and the board was not ready to accept the figures of the FBR. Once the issue of tax adjustment has been resolved, the government is ready to abolish amendment introduced through Finance Act 2016 of disallowing input tax adjustment against provincial services.
They said that the government can amend the Finance Act 2016 to abolish provisions of disallowing input tax adjustment, but according to the FBR, provinces have yet to pay over Rs 21 billion to the FBR on account of tax adjustments. This tax of Rs 21 billion has been adjusted by the taxpayers, but provinces are not ready to pay the adjusted amount to the FBR.
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