December 04, 2008

Pakistan plans to cut number of taxes

It is reported that Pakistan government plans to cut the number of taxes from 11 to 7 as part of the World Bank funded reforms project of the tax administration.

A recent notification released by federal board of revenue said that the numbers of members will be squeezed to this minimum level under the new FBR rules 2007, which can be increased as there was no capping for maximum.

According to the rules, under the current set up there will be 3 line members namely direct taxes, sales tax and federal excise and customs. 4 functional members namely fiscal research and statistics, human resource management, audit and administration. Support members namely legal, tax policy and reforms, information management systems and facilitation and tax education.

Under the original concept of reforms as agreed with World Bank, there would be 2 line members namely internal taxes and customs. The internal taxes will includes income tax and sales tax. While the strength and positions will be adjusted before the implementation of the whole reform project.

A senior tax official said that FBR has also sought one year extension from the World Bank for implementation of the decision, which was extended to June 2008 from June 2007. This deadline could be extended till December 31st 2009.