KARACHI: The Federal Government has extended the tenure of Tax Reforms Commission for a period of 90 days with effect from February 16, 2015. The Commission has not been able to make an impression so far.
Federal Minister for Finance Ishaq Dar on September 25, 2014 approved to constitute Tax Reform Commission (TRC) with the mandate to deliberate upon continuation of single stage General Sales Tax (GST) or put in place multiple stages GST, granting autonomy to the FBR and establishing Border Force to curb smuggling.
The Commission as its duties shall undertake, review and rationalization of direct and indirect taxes; customs tariff rationalization; review of autonomy and administrative structure of FBR and creation of border force to deal with illegal movement of persons and goods across the international borders. The Commission may also take up any other related issue.
The TRC was given deadline to present its recommendations within 120 days on important issues related to tax structure of the country.
On the eve of the budget 2014-15, the issue of multiple stages GST came under discussion as the IMF/WB were also recommending the government to place value added tax in its true letter and spirit. Even by imposing multiple stages GST, its standard rate might be reduced. TRC was formed to deliberate upon different option and come up with viable plan in 120 days period on this subject.
According to Terms of Reference (ToRs) of TRC, another issue for the Commission was to deliberate upon establishing Border Force on the pattern of UK in order to curb smuggling.
“The government has a firm resolve to promote tax culture in Pakistan but it is also equally important that the grievances of the people are addressed and their suggestions are acknowledged for improving our taxation system. Reform and rationalization are the key objectives of constituting, this Commission,” the finance minister had said.
The umbrella of trade bodies in the country, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in its Shadow Budget presented in May this year demanded single stage single digit sales tax to tackle with tax frauds and corruption, besides benefits should be passed on to consumers.