Khyber Pakhtunkhwa Revenue Authority (KPRA) has obtained legal powers to collect sales tax on key services from July 1, 2013. The services include hotels, marriage halls, lawns/clubs, beauty parlours, 59 types of telecommunication services, customs agents, ship chandlers, stevedores, advertisements on TV and radio, courier services, insurance services and services provided by stock brokers, banking companies or non-banking financial institutions.
Sources told Business Recorder Wednesday that on the pattern of the Sindh Revenue Board (SRB) and Punjab Revenue Authority (PRA), the KPRA has obtained legal backing for imposition of sales tax on a wide range of services. The KPRA would be different from SRB and PRA as it would be governed by the Policy Making Council of the Authority.
The Policy Making Council of the authority comprises Chief Minister, Khyber Pakhtunkhwa, Chairman; Minister for Finance Department, Khyber Pakhtunkhwa, Member; Minister for Law, Parliamentary Affairs and Human Rights, Khyber Pakhtunkhwa, Member; Minister of Excise and Taxation, Khyber Pakhtunkhwa, Member; Chief Secretary, Khyber Pakhtunkhwa, Member; Secretary to Government, Finance Department, Member; Secretary to Government, Law Department, Member; Secretary to the Government, Excise and Taxation, Member; a maximum of four private members to be nominated by the Government from amongst the eminent economists, tax, experts, bankers, chartered accountants, representatives of Chambers of Commerce and Industry or civil society organisations and Director General of the Authority would work as Member-cum-Secretary.
The council may co-opt any other person as member of the Council. The Council shall be a policy making body for the authority and shall formulate policy guidelines pertaining to tax administration, planning, reforms, budget and any other matter referred to it by the Government. The policies formulated by the Council shall be binding upon the KPRA. The Chief Minister and, in his absence, any of the nominee from the ministers shall be Convener of the Policy Making Council, sources said.
The KPRA shall comprise of a Director General and at least three Directors. The Authority, with the approval of the Council, will establish Directorates for tax related specialised functions including intelligence and investigation, finance, internal audit and inspection, training and research as deemed appropriate.
The KPRA will create, collect and maintain a data bank containing information in any form necessary to achieve the objectives of the Authority. The KPRA would have the power to share its data with or obtain and require data from Federal or any other provincial government or any of its statutory body, law enforcement entity or utility company, stock exchange, State Bank of Pakistan, Securities and Exchange Commission of Pakistan, Pakistan Telecom-munication Authority, banks, financial institutions or other organisations including any ministry, division and attached department, body or authority of the federal or any other provincial government.
Sources said that the KPRA would have the powers to administer and collect sales tax on services, administer and collect such other taxes, duties and levies as are assigned to it under a fiscal law, implement, with the approval of the Government, tax administration reforms, promote voluntary tax compliance and implement comprehensive policies and programmes for awareness and facilitation of taxpayers, stakeholders and employees to improve the quality of performance of the Authority as a service oriented entity.
Sources further revealed that the KPRA would have the legal authority to adopt modern effective tax administration methods, information technology systems and policies to consolidate assessments, improve processes, organise registration of tax payers, widen the tax base, and make departmental remedies more efficient including enforcement of, or reduction or remission in duty, penalty or tax, in accordance with the relevant fiscal law. It would have the legal powers to improve productivity through a comprehensive and effective human resource strategy, identify and select in transparent manner qualified work force on such terms and conditions and in such manner as may be prescribed and take appropriate measures including internal controls to combat corruption in the Directorates under the Authority and to provide for checks to ensure that the integrity of the employees is verified periodically through prescribed procedures and the said verification may constitute one of the criteria for the purposes of grant of incentives and consideration for promotion.
The KPRA would also have the authority to direct or advise, where necessary, investigation or inquiry into suspected duty or tax evasion and tax or commercial fraud, introduce and maintain a system of accountability of performance, competence and conduct of the employees, set up mechanism and processes for remedying the grievances and complaints of the taxpayers and review the existing fiscal laws and suggest improvements, if necessary.
The officials of the authority would have powers to arrest and prosecute tax evaders and those committed tax fraud. An officer authorised by the Authority by notification in the official gazette, on the basis of material evidence has reasonable cause to believe that any person has committed a tax fraud or any offence warranting prosecution, may cause arrest of such person, they added.