Islamabad: An International Monetary Fund (IMF) team visiting Pakistan recently announced its intention to present a proposal to the government with regard to the establishment of a National Tax Collection Agency, a news source reported. As per officials, this agency will be responsible for the collection of all federal and state taxes.
The IMF team is expected to undertake a two-week stay in Islamabad, and is scheduled to meet officials of the Punjab Revenue Authority (PRA) next week. As per reports, the two sides will discuss the fiscal arrangement among the centre and the provinces. The delegation will also hold a meeting with the Ministry of Climate Change to explore the possibilities of imposing pollution-related tax in the future.
Federal Board of Revenue (FBR) Chairman Shabbar Zaidi recently stated that the team had put emphasis on the need for the formation of a ‘harmonised tax collection system’ during its initial discussions with the Pakistani authorities. He added that this system was possible within the current arrangement of having a separate tax collection mechanism for the federal and provincial levels. Previously, the government had committed to IMF about forming a separate tax body.
According to sources, the IMF team had conveyed its concerns to the FBR senior officials that a fragmented taxation system was a hurdle in the way of policymaking and cause of increasing cost of compliance.
One official stated that Pakistan needed to set up a National Tax Collection Agency in the next one or two years. He added that this agency would have representatives from the provinces in order to harmonise the entire taxation system. He said that this system would include process of filing to pay the due amounts on all taxes under one umbrella.
The visiting IMF technical team will finalise its recommendations within the next one-and-a-half month. It will then present the proposal to the authorities concerned.
