Centre and provinces to sign MoU to adjust tax payments

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Federal Board of Revenue (FBR) Chairman Tariq Bajwa on Monday said the federal government was working to sign a MoU with provincial governments to adjust the payment of taxes. The chairman said this during a meeting of the Senate’s Standing Committee for Finance and Revenue that held with Senator Nasreen Jalil in the chair to review FBR tax collection activity for the 1st quarter.
Bajwa informed the committee that initially FBR collects taxes but after 18th amendment and devolution of ministries, General Sales Tax (GST) and services are now with provincial governments. He said during last fiscal year federal government paid 9.5 billion of taxes to the provincial government while provinces paid 4.5 billion rupees to the federal government. In this episode FBR faced loss of five million rupees therefore asked the provincial governments to adjust these variations. He said after consultation with the provincial governments FBR has drafted a MoU that will be signed within this month to address the issue.
Bajwa said the FBR has taken certain steps to enhance tax net and we have short listed details of those commercial power consumers who came in two top slots and they will be given notice to pay tax.
The FBR is taking steps to bring players, actors, singers and those who pay Rs 16,000 school fee monthly for their children under the tax net and gradually these people will file their tax returns.
The chairman appraised the legislative body that 17.1 percent growth seen in tax collection as compared to last year. Smuggling of goods from borders is major issue and due to poor law and order issue it is impossible to stop it from our western border.
Senator Humayun Mandokhel asked Bajwa to withdraw the GST from petroleum products to give relief to the people.
Bajwa said that when LC is opened by contractor tax is included in it but if opened by government or hospital then we exempt it.
The FBR chairman said that one percent tax has been reduced from corporate sector and it has been reduced to 34 percent. He said that FBR is against the vehicles amnesty scheme and department has no plan to restart such scheme in future.
The FBR top official said our tax to GDP ratio reduced from 9.1 percent to 8.5 percent last year.
Standing committee asked to remove duty from armed car and said that material for production of bullet proof should be duty free to facilitate the sector and to facilitate the sector.
Bajwa said that FBR has not increased the general sales tax (GST). Value added tax which was being paid by manufacturers has been reduced by 0.5 percent that will fruitful for the people.