Pakistan Tax Bar Association (PTBA) in its budget proposals suggested the Federal Board of Revenue (FBR) to involve an external, third-party to establish an extensive data base of locals to determine efficient compliance and removal of additional burdens for the already compliant persons.
According to details, the PTBA delegation headed by President Abdul Qadir Memon held a meeting with Haroon Akhtar Advisor to Prime Minister on Revenue and other senior FBR officials to discuss the key proposals for the upcoming budget for 2018-19.
During the proceedings, PTBA suggested a simplification of the regime to only include selected transactions within the scope. Further, the minor increase in tax base and lack of improved tax compliance reflect adversely on the use of differing tax rates for filers and non-filers to broaden the tax base.
PTBA said that such measures had only proved a burden for the current tax base and pointed out that the inequitableness created by the tax on banking transactions for filers.
Therefore, it is recommended the involvement of an external, third-party to establish an extensive data base of locals to determine efficient compliance, and removal of additional burdens for the already compliant persons.
PTBA said that the tax created unreasonable liabilities for the sector and should be deleted to create an equitable business environment. It recommended that the process of audits and assessments could be simplified, and further hardships for taxpayers could be eliminated by the rationalization of existing tax rates, exemption of inter-corporate dividends, simplification of the procedures to claim exemptions on imports, and elimination of tax on undistributed reserves.
Additionally, the penalties imposed on taxpayers, being harsh in various instances, should be revised downwards for the betterment of the taxpayers.
The PTBA went on to recommend that the current sales tax rates must be rationalized to reduce the costs for consumers. Additionally, since the divide between the respective authority of Federal and Provincial legislations in relation to certain service taxes is slim, there exists extreme confusion, harassment, litigation, and unrest for the business community during the classification of the same.
It is, therefore, suggested that the tax administrators work out a simple working law, and ease the process for the taxpayers.