Pakistan will launch a comprehensive tax operation package in the next budget (FY 2022-23), which will reflect a federal-provincial consensus on the new tax regulations.

According to some top officials, who have a role in budget preparation, at the Federal Board of Revenue (FBR) and the Ministry of Finance, Pakistan will soon receive a long-term soft loan of at least $800 million for this project to be completed in 2022-23. They said reputable international institutions with profiles on taxation restructuring would be engaged to assist in this task.

As an initial part of the entire mechanism, an exercise would be carried out on the federal-provincial coordination to ensure broadening of the national tax base, fulfilling the need to test-run the new system.

The officials said the Council of Common Interest (CCI) would examine the basic goals, targets, structural format, and regulatory details of the new system before its final approval by the federal cabinet and later by the Parliament.

The system is meant to ensure that the GST Withholding rates are rationalized and collecting the tax is converted into real-time digital in all the relevant aspects. To this end, the National Database Regulatory Authority (NADRA) would be engaged as a basic data provider and examiner on businesses players from the lowest taxable to the top market players in the application of GST.

Once the system crosses the firm upstage, its connectivity to tax on income and Customs would be ensured to plug the holes presently taken advantage of by the large and medium scale business actors and these operating on the market margins, the officials added.

Source: Pro Pakistani