The government is set to introduce a finance supplementary bill which may bring major changes in sales tax regime, sources said on Wednesday.
The sources said that in the Sales Tax Act, 1990, zero-rating under the Fifth Schedule is proposed to be streamlined and certain entries are to be withdrawn.
Exemption regime under Sixth Schedule is proposed to be curtailed including pharmaceutical sector and restricted to import and local supply of essential commodities only.
Reduced rates of sales tax under Eight Schedule on certain items are proposed to be streamlined in order to achieve equity in the tax system.
Likewise, sales tax on import of high-end mobile phones in CBU condition under Ninth Schedule is proposed to be rationalized. The scope of Tier-1 retailers is also proposed to be rationalized.
The government is also planning to bring changes in Customs Act, 1969.
Under the Customs Act, 1969 the power of Collector to determine the value of imported or exported goods is proposed to be withdrawn which shall be exercised by Director Valuation that has been the case prior to Finance Act, 2021.
Similarly, the appeal against the decision of DG Valuation shall hereinafter be filed before judicial for a instead of Member Customs (Policy) in consonance with the principle of separation of judicial and executive functions. Moreover, in the interest of revenue, corporate guarantee is proposed to be taken out as was the case before September 15, 2021.
Minimal amendments in the Income Tax Ordinance, 2001 are aimed at promoting digital economy, documentation and facilitation measures. Additionally, advance tax on foreign produced drama serials is proposed to be introduced and slightly enhanced on cellular services.
Disclosure of information in respect of high-level public officials is proposed in line with the requirements of the development partners, rule of law and integrity. Furthermore, Special Purpose Vehicle (SPV) under the REIT regulations, 2015 is proposed to be extended.
During the tenure of the present Government far-reaching structural and administrative reforms have been initiated to achieve economic and financial stability through inclusive reforms and sustainable economic growth.
The Federal Board of Revenue (FBR) is committed to achieve tax reforms with the assistance of development partners with the ultimate objective to be able to generate sufficient revenue for the State.
The underlying purpose of reforms is also to rebuild the tax system on ideal principles of taxation and without any distortions. Amendments in tax laws, as outlined below, are warranted in order to achieve efficiency and equity in the tax systems through removal of aberrations, broaden the tax base, and document the economy.