World Bank Loan Securing Measures: Taryn – Newspaper

0
31

[ad_1]

ISLAMABAD: The government will make every effort to address three to four outstanding issues, including tax harmonization, to secure more than $ 800 million in World Bank loans over the next month.

Finance Minister Shaukat Tarin said Pakistan has already received $ 400 million for tax administration reforms out of a total of $ 1.2 billion in World Bank loans. dawn on Saturday. “We need this money and we will take all the necessary measures,” he said.

Regarding tax harmonization, the minister said he will meet with provincial finance ministers in the next seven to ten days to resolve outstanding issues. According to him, several meetings have already been held at the technical level in this regard.

According to the World Bank document, harmonization involves an agreement between the federal government and the provinces to apply the same definitions, principles and rates of general sales tax (GST) on goods and services.

Two panels are busy preparing steps to expand the tax base

This means that the federal and provincial governments will revise their laws and regulations to apply the same definitions of goods and services taxable economic activities to goods and services, levy a goods and services tax based on the place of sale / consumption rather than the headquarters. firm apartments, and it is desirable, but not necessary, to standardize their tax rates.

Mr Taryn agreed that there are problems and the federal government will intervene to resolve these issues between the Federal Board of Revenue (FBR) and the provincial tax authorities. According to him, this issue will be resolved within the next month. “I am committed to solving this problem,” he added.

GST rates also needed to be optimized. There are currently 26 tariffs for different categories of goods and several tariffs for services in different provinces. These multiple rates complicate both tax administration and taxpayer compliance.

This was announced by Dr. Wakar Masood Khan, Special Assistant to the Prime Minister for Finance and Revenue. dawn that two subcommittees are already working on proposing measures to broaden the tax base, which is one of the main initiatives of the World Bank reform project.

The committee reports and the government’s action plan based on the recommendations are expected by the end of this month, he said. Dr. Khan said the government will announce a clear strategy to expand the tax base and bring retailers to the tax network by August 31. He said that the issue of tax harmonization with the provinces will be resolved in order to better collect taxes and facilitate the work of taxpayers.

Harmonization of taxes will allow GST to be collected through a single online portal where firms will register, pay GST and claim GST refunds for both goods and services at the same time. GST harmonization will help the FBR and provincial tax authorities expand their tax bases and improve compliance by sharing taxpayer information.

Recent World Bank estimates show that Pakistan collects only half of the economy’s tax potential, leaving almost two-thirds of its goods and services tax liabilities and more than half of income tax unpaid. For example, most retailers do not pay taxes.

Finance Minister Shaukat Taryn said the World Bank is requiring Pakistan to give notice of energy sector reforms. He said the government will soon consider the issue of a unified power generation plan at the next meeting of the Council of Common Interests. “We will approve the plan at a meeting of the Chamber of Commerce and Industry,” he said.

This (approval of a comprehensive electricity plan) is one of the preliminary actions for obtaining a loan of about USD 400 million for the energy sector. Likewise, the government is also finalizing the Circular Debt Management Plan ahead of time to keep things running smoothly.

Mr Taryn said there are two more World Bank claims that he does not disclose.

Pakistan’s tax system is very complex, according to a World Bank report, and even people and companies who would like to pay their taxes find that complying with these requirements takes a significant investment of time and money.

For example, the division of the GST into services between the federal government, which collects the goods tax, and the provinces, which collect the service tax, means that firms that provide services throughout Pakistan must file 60 tax returns per year for GST only and comply with various laws, regulations and administrative procedures for the federal level and each of the four provinces.

Published in Dawn, 15 Aug 2021

[ad_2]

Source link