A high-ranking delegation from the Federal Board of Revenue led by Mr Salman Siddique, chairman of FBR, visited the Federation of Pakistan Chambers of Commerce and Industry Head Office in Karachi on Friday, 28th October 2011, where they met prominent members of the business community.
The second round of FPCCI-FBR meetings was held to settle contentious issues raised by the business community at the seminar organised by FPCCI on Wednesday, 26th October, when the Facilitation and Taxpayers Education (FATE) Wing of FBR held an interactive session with FPCCI members and representatives of Tax Bar Associations.
The meeting was presided over by Mr Khalid Tawab, Acting President-FPCCI; and FPCCI was represented by Mr Tariq Sayeed, VP-CACCI; Mr S.M. Muneer, President-IPCCI; Mr Iftikhar Ali Malik, VP-SAARC CCI; Mr Dawood Usman Jakhura and Engineer Usman Shaikh, VPs-FPCCI. Other prominent members of the business community were also present on the occasion, including Mian Zahid Hussain, Mr Shaukat Ahmed, Shaikh Shakil Ahmed Dhingra, Mr Mazhar Ali Nasir, Mr Zubair Tufail and Mr Mansha Churra.
During the meeting, the Chairman-FBR and his team understood the concerns that were raised by the business leaders patiently. Regarding deletion of Annexure D of the Income Tax Return, the Chairman-FBR conceded that the issue can only be settled after detailed consultation with representatives of FPCCI, until which it will be deferred. The chairman agreed to defer the mandatory requirement to provide CNIC or NTN by manufacturers, importers and exporters until 31st December 2011. In the meanwhile, he stated that Annex F and H of the Sales Tax Return form, would be revised in consultation with the business community and a one-page, simple substitute will be formulated. Their implementation was also extended up to 31st December 2011.
The Chairman-FBR agreed to consider Acting President-FPCCI’s suggestion regarding a fixed sales tax scheme for retailers. It was further resolved that the tax return forms would be printed in Urdu as well as English. FBR will expedite the refund of longstanding sales tax claims. He said that the minimum tax of 6 per cent on services will be reduced to 1 per cent and the amended SRO would be issued shortly.
Responding to a query, the chairman commented that audit would be conducted on risk parameter basis for which selection would be made randomly via computer balloting with transparent parameters. It was also resolved that the valuation data of importers and exporters will be given to FPCCI. The chairman also agreed to address the problem faced by the importers due to provisional assessment under Section 81 of the Customs Act, 1969 and finalising the importer’s value of goods. The period of provisional assessment would be 120 days only. He also agreed to restore Rule 14 of the Sales Tax Rules, 2006, which was omitted via SEO 487/2011, so that the previous provision of auto-revision could be restored.
Regarding the contention that sales tax at 4 per cent and 6 per cent for zero-rated industries is not workable, the chairman agreed to finalise the issue in consultation with FPCCI. The chairman-FBR also agreed that the Executive and Adjudication in sales tax cases are two separate forums and would be separated. For this purpose, Section 45 of Sales Tax Act, 1990 would be restored.
Regarding the menace of under-invoicing and mis-declaration, the chairman said that a uniform rate of valuation would be implemented throughout Pakistan. He also agreed to revive the mechanism of ADRC so that out of court settlement may be used for sorting out thousands of pending cases in court. There was consensus among all participants at the meeting that the tax base needed to be broadened and documentation of the unorganised sector of the economy was essential, if Pakistan ’s economy was to prosper. Chairman-FBR requested cooperation from the business community in helping to achieve this objective, and all businessmen assured the FBR officials of maximum cooperation in this regard.
