Islamabad: The Federal Board of Revenue (FBR) is mulling various suggestions for introducing legal and technical improvements in its sales tax regime in order to boost the revenue stream for the remaining period of Tax Year 2019-20, according to news sources.
One
of the changes proposed is to extend the scope of the Third Schedule (retail
price items) of the Sales Tax Act 1990 to facilitate revenue generation. On the
retail price basis, the third schedule items are subjected to sales tax. This
step will bring revenue through tax collection at retail price stage.
Presently, over 30 items fall under the chargeable retail price taxation category. To this effect, FBR had expanded the scope of retail price on imported items in the budget of the fiscal year (FY) 2019-20.
These
imported goods are liable to declare retail price or pay 30% value addition as the
retail price to get their goods cleared.
There
has been another proposal to increase sales tax from 17% to 18%, which will
have serious inflation and revenue impact. However, it has not been yet
confirmed that this proposal will make it to the mini-budget.
Moreover,
the government is planning to reduce regulatory duties and additional custom
duty charges from certain items at the import stage.
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