The Federal Board of Revenue on Saturday came under severe criticism with financial experts alleging that the tax managers deformed the original shape of the Value Added Tax into the Reformed GST to retain maximum powers.
An official who remained active in preparation of Value Added Tax (VAT) Law on condition of anonymity said that "the original VAT law prepared by a team of international experts which was very excellent but it has been distorted after the changes made by the FBR. Talking to media here on Saturday on the sidelines of a seminar "Making the 18th Amendment and NFC Award Work," he complained that even the RGST drat law has not been shared with him. He claimed that the FBR seemed to be against the RGST because this could be a threat to their vested interests.
Taj Haider of Pakistan People's Party (PPP) at the question-hour session during the seminar and later talking to media said there are massive irregularities in the tax refund system. "The FBR officials wanted to retain the powers for refunds and tax collection, which is contrary to the sprit of the NFC Award and the 18 Amendment.
"The FBR failed miserably in collecting the tax," he said, adding that instead of giving right to the province for collection of sale tax on services there is a new debate as to what is service and what is not.
Dr Pervaiz Tahir, former chief economist PIDE said despite repeated assurances by the authorities that RGST on services is a provincial subject, the constitutional provision in this regard is not being followed in letter and sprit. Advisor to the finance ministry on RGST Dr Ehtesham Ahmed made a presentation about various provisions of RGST on services. Dr Hafeez Pasha who was moderator of the seminar said that last thing Pakistan can afford to end up with a complicated tax system that could lead to a war among provinces.