KARACHI: Tax authorities and foreign investors are broaching a critical issue of sales tax input adjustment, which was recently disallowed by the government and feared to puff up the cost of doing business, sources said on Monday. The sources said a team comprising Advisor to Prime Minister Haroon Akhtar Khan, Member Inland Revenue (Policy) and other senior officials at the Federal Board of Revenue held a number of meetings with the office bearers of the Overseas Investors Chamber of Commerce and Industry, American Business Council and the chairman of Sindh Revenue Board.
They said the key point of the discussions was the recent amendments made through the Finance Act, 2016 into the Sales Tax Act, 1990, which disallowed sales tax input adjustment on services or tax collected on them by provincial authorities.
As per the amendments, the provincial input tax would not be adjustable against federal sales tax. This facility was allowed since March 2014. The taxpayers said this will imply dual direct taxation in the country since the indirect taxes paid to provinces would not reduce the incidence of sales tax paid to the federation. (The News)
Special Assistant to Prime Minister on Revenue Haroon Akhtar has assured the investors and multinational companies that the issue of disallowing input tax adjustment against provincial services would be resolved by the end of current month. Sources told Business Recorder here on Monday that Haroon Akhtar has convened separate meetings with Chairman Sindh Revenue Board (SRB), Overseas Investors Chamber of Commerce and Industry (OICCI) and Pakistan Business Council (PBC) at Karachi.
Special Assistant to Prime Minister on Revenue went to the office of SRB and met its Chairman and advisor to discuss key issues including reconciliation of input tax adjustments data, disallowance of input tax adjustment against provincial services and other related issues. In separate meetings with the OICCI and PBC, Haroon Akhtar conveyed to the top investors and representatives of multinational companies that the issue would be duly resolved by the end of current month. Other key issues raised by the members of the OICCI would also be given due consideration by the FBR.
On the issue of Super Tax, Special Assistant to Prime Minister on Revenue explained the OICCI/PBC about the rationale behind extension of one year in payment of Super Tax by the corporate/banking sector. (Business Recorder)