There has been no decline in the number of tax payments from 47 to 16, as claimed by Chairman Board of Investment (BOI) in a press conference held on Wednesday, maintained tax experts. Business Recorder approached the Chairman BoI for clarification and he stated that the "number of taxes has not declined but frequency of tax payments has reduced from 47 to 16 which has been appreciated by World Bank team and recognised by Lahore Chamber of Commerce and Industries."
Imtiaz Ahmad Khan, former CEO Pakistan Revenue Automation Limited (PRAL), told the BR that businesses are required to make at least 54 tax payments per year. The payments made to various tax administrations and agencies include 12-monthly payments to the FBR on sales tax on goods, 12-monthly payments to each Provincial Revenue Authority on sales tax on services, four quarterly payments of advance income tax to FBR, 12-withholding taxes to FBR, 12-monthlty payments of EOBI Contribution, 1-Annual Professional Tax, 1-Annual Income Tax along with the annual tax return. There are a minimum of 54 tax payments by a company in any year whereas if the company operates in all the provinces then it has to make an additional 12-monthly payments to each tax provincial administration per year. Thus if a company is operating throughout the country it has to make additional 36-monthly payments making the total number of payments 90 times a year which consumes a lot time of the company.
Tax Lawyer Waheed Shahazad Butt has urged the government to reduce the burden on companies of making tax/fee payments 54 to 90 times to various agencies like FBR, Sindh Revenue Board, Punjab Revenue Authority, Khyber Pakhtunkhwa Revenue Authority, Balochistan Revenue Authority, Employees Old Age Benefit Institute, Provincial Board of Revenue (for Professional Tax), etc.
An anecdotal survey carried out by the BR revealed that there is a consensus amongst tax experts/lawyers that there is an urgent need to simplify and re-engineer the payment and return/statement filing processes. Under the re-engineered processes, a company should be required to pay all duties, taxes & fees through a National Tax Payment (NTP) mechanism maximum once a month. The re-engineered system should electronically bifurcate and credit the payments made through NTP to the respective federal and provincial authorities at the close of day. A National Business Statement (NBS) can be formulated and obtained electronically once a month from each business entity and relevant information may be transmitted to the respective organisation electronically, Waheed Shahzad Butt added. The ranking of Pakistan in paying taxes index was 173 out of 190 countries according to World Bank's Ease of Doing Business Report 2019.