National Tax Authority for unified single tax being launched in Pakistan?

National Tax Authority for unified single tax being launched in Pakistan?

The Caretaker Federal Government is in the process of establishing a National Tax Authority as part of its broader reform agenda for the Federal Board of Revenue (FBR), according to sources.

FBR Chairman Amjad Zubair Tiwana recently briefed Caretaker Prime Minister Anwar-ul-Haq Kakar on the comprehensive reform agenda aimed at enhancing tax collections and restructuring the relationship between tax policy and administration or enforcement.

To achieve these goals, the FBR has initiated the implementation of tax reforms, considering the separation of the policy department from the FBR and placing it under the jurisdiction of the Ministry of Finance.

There is also a possibility of merging all tax authorities, including both the FBR and Provincial Tax authorities, into a unified National Tax Authority. This move seeks to introduce a simplified and cohesive taxation system.

As part of the reforms, the FBR has outlined plans to overhaul the withholding tax regime. Notably, despite the retail sector contributing 18 percent to the country's Gross Domestic Product (GDP), its tax contribution stands at only 4 percent.

To address this, the government plans to compel all private sector banks to share details of distributors and wholesalers with the FBR to generate tax demand.

Furthermore, the tax reform program proposes the establishment of a special Customs Board to oversee the operations of Pakistan Customs. This board is expected to include at least five federal secretaries, covering Finance, Industries and Production, National Food Security, Commerce, and Interior, as ex-officio members.

In a bid to streamline operations, the government has decided to create the position of 'Member Appraisement' within the Customs Department. This move aims to separate the appraisement process from operations and enforcement activities.