ISLAMABAD - The government has reportedly finalized the draft regarding gradual removal of exemption of sales tax over more than 70 items, with first phase realizing withdrawal of SROs until December, over IMF’s directives.
Deliberating over the issue, a senior officer of FBR (Federal Board of Revenue) states that all recommendations regarding withdrawal of these SRO’s (Statutory Regulatory Order) had been prepared by a 6-member committee formed by FBR on directives of finance minister, constituting of additional finance secretary (budget), FBR members of land revenue policy, member customs, member strategic planning, member research and statistics and member National Tariff commission, took a comprehensive view of more than 150 items related to fertilizer, pharmaceuticals , defense stores and others, and previously exempted from sales tax.
This withdrawal of exemption from sales tax, whose draft would be presented to finance minister, after his arrival in Pakistan, is expected to net revenue of an additional Rs 24 billion to FBR.
Sources have also added that FBR was authorized to annul any exemptions over sales tax according to 6th schedule, of sales tax act 1990, section 13. Among other actions being mulled over include termination of any special sales tax schemes, enforcing normal regimes.
It has also been disclosed that all SROs, custom duties discriminating against importers, are also being in the process of being terminated, as decided according to IMF conditions and in order to discourage any economic disparity in accordance with government’s 3-year trade competitive program.
World Bank and IMF officials have also been informed about the issue by Pakistani economic delegation during the sidelines of annual sessions of IMF and World Bank in Washington.