The federal government will shortly issue a clarification aimed at fulfilling two major demands of Sindh government pertaining to sales tax on services and multiple criteria as per the Presidential Order. On the conclusion of the meeting of the Revenue Advisory Council on Friday.
Federal Board of Revenue Chairman Sohail Ahmed told Business Recorder on Friday that both the issues of Sindh government including sales tax on services as provincial right in Presidential Order would be resolved by the government. He said the Secretary Finance has conveyed to the Revenue Advisory Council that clarification would be issued in the next 2 days to fulfil the demands of the Sindh government.
The issues raised by Sindh would be addressed in coming days for mentioning the sales tax on services as provincial right under the Presidential Order. In this regard, the federal government would amend the relevant order. The FBR fully recognises that collection of sales tax is the right of provinces and the Provincial VAT Bills have given this due right to the provincial governments.
The legislators of the Provincial VAT Bills have given this right of collection of VAT on services to the provinces under the Provincial VAT Bills. When asked about the walkout of the Secretary Finance Sindh from the meeting of the Revenue Advisory Council, Sohail Ahmed said that the secretary has not boycotted the meeting. Secretary Finance Sindh has submitted his observations on the VAT during the meeting.
"He has to catch a flight for Karachi at 7pm in the evening. Therefore, he left the meeting of the Revenue Advisory Council, which has nothing to do with the walkout," he clarified. He said the meeting was not convened to take decision on VAT, as there was general discussion on VAT and overall revenue collection performance.
Meanwhile, sources said the meeting also discussed the budgetary framework in the meeting along with other crucial issues such as revenue collection and review of VAT implementation progress. The meeting also discussed the proposed budgetary measures to generate additional revenue in next fiscal year.