Observer Report Islambad
In a watershed development and to press his vision into practice, Mr. Shaukat Tarin, Advisor to PM on Finance & Revenue has launched the formulation of Inland Revenue Code in a bid to harmonize all inland taxation laws and maximize facilitation of taxpayers.
It promises to ensure ease of doing business by removing multiplicity of taxing statutes and a plethora of rules & regulations devised to operationalize them.
It is pertinent to mention that FBR, on 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, & the Islamabad Capital Territory (Sales Tax on Services) Ordinance, 2001.
These four tax statutes are then supported by 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 complexed and even un-implementable. However, previous governments have not been brave enough to embrace this challenge.
Keeping this in view, the PTI government has decided to harmonize all these four tax laws by merging them into one law book supplemented by single rules book.