The Federal Board of Revenue (FBR) has decided to take complete feedback, by the end of November 2009, from the business community on the new value-added tax (VAT) law for incorporating viable proposals. Sources told Business Recorder here on Saturday that the Federation of Chambers of Commerce and Industry (FPCCI) and Lahore Chamber of Commerce and Industry (LCCI) have formed working groups to obtain objective feedback from business community for formulation of VAT regime.
The FBR has directed Member Direct Taxes Policy and FBR Member Strategic Planning and Research & Statistics (SPS) to take feedback from business and trade on new VAT system and consolidate it before the end of November 2009. Sources said that the FBR has been engaged in dialogue with all chambers of commerce and industry, tax bar associations and trade bodies to obtain their input on VAT.
It has given assurance to the business community that the tax people would do proper communication with the business and trade for understanding the implementation of the new law. The FBR has already started interaction with leading taxpayers to obtain their viewpoints on the issue. The donor agencies would only provide technical assistance, and the rest of practical work would be done by Pakistani officials. However, the government would ensure extensive consultations with businessmen before implementation of the broad-based VAT, they said.
It is important to mention that during last international VAT conference, the President of Islamabad Chamber of Commerce & Industry (ICCI) had warned the FBR that the retailers'' community should be taken into confidence before implementation of the broad-based VAT to avoid strike calls, agitation and closure of business and trade. The major effect of VAT would be on the business community. Secondly, tax projections of Rs 600 billion from VAT have also scared the business community, already paying huge amounts of taxes.
It is extremely necessary to take retailers, wholesalers and dealers into confidence for implementation of the VAT. Without input of retailers it would be extremely difficult to implement the VAT at the retail stage. Fore this purpose, shopkeepers and owners of retail outlets should be invited to participate in the VAT drafting process to handle enforcement related issues, he added.