ISLAMABAD: Adviser to Prime Minister on Finance and Revenue Shaukat Tarin has launched a special initiative on simplification of tax laws to maximizing facilitation for taxpayers.
In a watershed development and to press his vision into practice, Adviser on Finance and Revenue has launched the formulation of the Inland Revenue Code in a bid to harmonize all inland taxation laws and maximize facilitation of taxpayers, said a press release issued here.
It promises to ensure ease of doing business by removing multiplicity of taxing statutes and a plethora of rules and regulations devised to operationalize them.
It is pertinent to mention that FBR, on the domestic side, implements and enforces four major tax laws i.e. the Income Tax Ordinance, 2001, the Sales Tax Act, 1990, the Federal Excise, 2005, and the Islamabad Capital Territory (Sales Tax on Services) Ordinance, 2001.
These four tax statutes are then supported by an equal number of rules compiled in voluminous books comprising the Income Tax Rules, 2002, the Sales Tax Rules, 2006, the Federal Excise Rules, 2005, and the Islamabad Capital Territory (Sales Tax on Services) Rules, 2001.
Resultantly, a taxpayer has to consult practically eight law books in order to engage with the tax system and pay off his/her tax liability.
It goes beyond saying that the tax laws needed harmonization and simplification. This has long been demanded by World Bank, IMF, ADB and other bilateral and multilateral donors.
Similarly, there have been pressing demands by the civil society, lawyers’ community, and also superior courts who have found the above laws to be very complex and even un-implementable.
The government has decided to harmonize all these four tax laws by merging them into one law book supplemented by single rules book. It is in this context that in collaboration with ADB, a high-level committee has been constituted by FBR consisting of eminent tax professionals from public sector and legal experts from ICAP to continuously oversee and review the draft legislation to ensure quality and correctness. The said committee would monitor the drafting of harmonized Inland Revenue Code, covering all tax laws by the end of March 2022.
After consultation with all key stakeholders including chambers of commerce, trade bodies, tax practitioners and field formations over April and May, 2022, it will be available for presentation before the Parliament in the Budget Session, 2022 for promulgation.
It is positively hoped that the new Inland Revenue Code will be enforced with effect from July 1, 2022.
This high-value policy intervention is organically embedded in the larger vision of FBR to promote a culture of automation and digitization in order to ensure taxpayers’ facilitation.
In order to ensure that the Inland Revenue Code is thoroughly discussed with all major stakeholders and finally developed within the given timelines, Adviser on Finance and Revenue has directed Chairman FBR to personally review the progress of this immensely important draft law and update him on regular basis.