ISLAMABAD: Financial and tax adviser Shaukat Tarin initiated the formulation of the Internal Tax Code (IRC) with the aim of harmonizing all domestic tax laws and maximizing taxpayer facilitation as part of the government’s initiative on simplification of tax laws.
We positively hope that the IRC will be applied from July 1, 2022.
The proposed reforms are in line with the government’s promises to ensure the ease of doing business by removing the multiplicity of tax laws and a plethora of rules and regulations designed to make them operational.
In a major development, the RBF formed a high-level committee made up of prominent public sector tax professionals and legal experts from ICAP to continuously monitor and revise the draft law to ensure its quality and effectiveness. ‘exactness. The committee is responsible for harmonizing the four tax laws by merging them into a single law book supplemented by a single rule book. The Asian Development Bank (ADB) will assist the RBF in simplifying tax laws.
Committee to Merge the Four Tax Laws into One Book
Nationally, the FBR implements and enforces four major tax laws: the Income Tax Ordinance of 2001, the Sales Tax Law of 1990, the Federal Excise Law of 2005 and the 2001 Ordinance on the Capital Territory of Islamabad (Sales Tax on Services).
These four tax laws are then supported by an equal number of rules compiled into voluminous books including the 2002 Income Tax Rules, 2006 Sales Tax Rules, 2005 Federal Excise Rules 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 their tax liability.
The committee would follow the drafting of the harmonized IRC, covering all tax laws by the end of March 2022.
After consultation with all key stakeholders, including chambers of commerce, trade bodies, tax specialists and on-the-job trainings in April and May 2022, it will be available for presentation to parliament during the budget session with a view to its promulgation.
An official announcement from the RBF said it went 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 from the superior courts which have found the above laws very complex and even unenforceable.
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.
In order to ensure that the IRC is discussed in depth with all major stakeholders and ultimately developed within the allotted timeframe, Mr Tarin asked the Chairman of the RBF to personally review the progress of this hugely important bill and to update it regularly, the ad added. .
Posted in Dawn, le 13 November 2021