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NTC Develops Tax Collection Framework for Toll Manufacturing and Transportation Businesses

Date: September 16, 2021 Author: Web Desk Category: Market Short URL Comments: 0

The National Tax Council (NTC) has formulated a tax collection framework for toll manufacturing and transportation business in the country, as it has decided that the collection of sales tax on toll manufacturing will rest with the federation, while the provinces will have the taxation rights on the transportation business.

The decision was made in the NTC meeting held with Federal Minister for Finance and Revenue Shaukat Tarin in the chair at the Finance Division on Thursday. Provincial Finance Ministers, Secretary Finance Division, Chairman Federal Board of Revenue (FBR), Chairman Sindh Revenue Board, and other senior officers attended the meeting.

In his opening remarks, the Finance Minister welcomed the participants and emphasized the need for developing consensus between the center and the provinces in matters relating to sales tax harmonization. He emphasized on resolving tax-related issues with mutual cooperation between the federation and the federating units.

In his detailed presentation, Chairman FBR Dr. Muhammad Ashfaq Ahmed pointed out a number of areas for further deliberation and work out an arrangement in a collaborative manner relating to harmonization of GST among the federal and provincial governments.

On the occasion, FBR and the provincial Finance Ministers expressed their views on taxation on transportation, restaurants, toll manufacturing, and the construction sector.

NTC considered different proposals with regard to having a single portal for filing sales tax returns. It was informed that a single portal was being developed and was likely to be launched by the first week of October 2021.

It is pertinent to note that the launch of a single portal for filing returns will cut the compliance cost for the taxpayers and will help increase Pakistan’s rating on Ease-of-Doing Business Index.

NTC decided that detailed input will be invited from the Provincial Revenue Authorities regarding the development of a single portal, making it acceptable to all. Similarly, it was decided that FBR will also develop a standardized income tax returns format in consultation with the provincial governments.

Regarding taxation on the construction business, NTC decided that the taxation right would be shared as per the constitutional arrangements, and a technical committee consisting of all revenue authorities would decide the operational modalities. After having views of FBR and the provinces on taxation of restaurants, the Finance Minister, in his capacity as head of NTC, decided that the provinces will continue to tax restaurants, however, a reference drafted in consultation with the provinces will be sent to the Law Division for its opinion.

All the stakeholders agreed to proceed in the greater national interest and with harmony under the umbrella of NTC.

Source: Pro Pakistani