ISLAMABAD: The federal government has decided to harmonize the four tax laws by merging them into a single collection of laws, a “single rule book”, in order to promote automation and digitization in order to make it easier for taxpayers.
According to the details, the Federal Board of Revenue (FBR) has established a high-level committee made up of prominent public sector tax professionals and legal experts from ICAP to continuously monitor and revise the bill in order to bring it about. ensure quality and accuracy.
This committee would monitor the drafting of the harmonized tax code by the end of March 2022, covering all tax laws.
After consultation with all key stakeholders, including chambers of commerce, professional bodies, tax specialists and on-the-job training in April and May 2022, it will be available for presentation to Parliament during the 2022 budget session for enactment. .
The new Inland Revenue Code will come into effect on July 1, 2022, the FBR said in its press release issued on Friday.
Moreover, this high-value political intervention is organically anchored in the larger RBF vision to promote a culture of automation and digitization to ensure taxpayer facilitation.
He said the advisor on finance and revenue has asked the FBR president to personally review the progress of this hugely important bill and update it regularly thereafter, this exercise has been launched.
In its document, FBR said this was a decisive development as it was the vision of the adviser to the Prime Minister in charge of finance and revenue, Shaukat Tarin, who wanted to initiate the formulation of the tax code in the aim to harmonize all domestic tax laws and maximize taxpayer facilitation.
It promises to ensure the ease of doing business by removing the multiplicity of tax laws and a plethora of rules and regulations designed to operationalize them.
It is relevant to mention that FBR on the national side implements and enforces four major tax laws such as Income Tax Ordinance, 2001, Sales Tax Law, 1990, Federal Excise , 2005, and the Capital Territory of Islamabad (Sales Tax on Services) Ordinance, 2001.
These four tax laws are then supported by an equal number of rules compiled in voluminous books including Income Tax Rules, 2002, Sales Tax Rules, 2006, Federal Excise Rules, 2005 and Islamabad Capital Territory Rules (Sales Tax on Services), 2001. As a result, a taxpayer must consult nearly eight books of law in order to engage with the tax system and pay his tax liability.
It goes beyond saying that tax laws needed harmonization and simplification. This has long been demanded by the World Bank, IMF, AfDB and other bilateral and multilateral donors. Likewise, there have been pressing demands from civil society, the lawyer community and also the superior courts which have found the above laws very complex and even unenforceable. However, previous governments did not have the courage to take up this challenge.