The Chair-man of Federal Board of Revenue (FBR), Salman Siddiq, said on Monday that the 4-6 percent sales tax applicable on the local supplies of five export-oriented zero-rated sectors has been combined into a single rate of 5 percent, which would be notified before July 1, 2011.
Responding to a query of Business Recorder during a post-budget press conference of the FBR at the Board''s Headquarters, the chairman said that the sales tax rates of 4-6 percent have been merged into a single rate of 5 percent. The SRO.231 (I)/2011 would be suitably amended before July 1, 2011 for implementation of the single rate for the zero-rated sectors. About FBR''s failure to initiate post-refund audit under the Expeditious Refund System (ERS), he said that the post-refund audit under the ERS has been initiated during the last 1-2 days.
When asked about the powers of the Directorate General of Customs Intelligence, FBR Chairman said that the Board has created a separate directorate general for domestic taxes. The Directorate General of Intelligence and Investigation Inland Revenue has been initially given the task to document the economy and broaden the tax-base. The FBR has given legal backing to the DG I&I IR through Finance Bill (2011-2012) covering sales tax, federal excise and income tax.
However, the Directorate General of Customs Intelligence would exclusively deal with the cases relating to the customs duty. The on-going cases of sales tax would be completed by the DG Customs Intelligence. The sales tax cases already detected by the Customs Intelligence would be completed by the same directorate. Following creation of the DG I&I IR, the Directorate General of Customs Intelligence would solely deal with the customs related cases, he added.
Appreciating the role of Shahid Hussain Asad Director General, Directorate of Intelligence and Investigation, Inland Revenue, tax authorities commented that the directorate has shown full commitment to deliver the results in the presence of environment provided to the agency for bringing un-documented persons into the tax net. It is important to mention here that prior to integration of domestic taxes, Directorate General Intelligence and Investigation FBR was looking after the cases of sales tax and federal excise.
After the integration of taxes under the nomenclature of Inland Revenue, it is essential to create a separate Directorate General, Intelligence and Investigation Inland Revenue with the mandate to investigate cases related to the three domestic taxes. Therefore, it is proposed to suitably amend section 30A of the Sales Tax Act, 1990 and section 29 of the Federal Excise Act, 2005.