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CBR considering goods delivery without sales tax

KARACHI (February 13 2005): Central Board of Revenue (CBR) Member, Sales Tax, Shahid Ahmed said here on Saturday that the government is going to introduce a new scheme for delivery of goods without sales tax. Talking to newsmen after a meeting with Lasbela Chamber of Commerce and Industry (LCCI), he said at present the law department is examining the scheme. He said the ECC had given approval of the scheme on January 18 and it is likely to be notified in next few weeks.

Shahid said under the scheme manufacturers may purchase raw material without payment of sales tax. However, it would be mandatory that manufacturer will have to make payment for raw material through crossed cheques or through inland L/C.

He said the scheme would go a long way in resolving the sales tax refund problem.

He said the government is trying to simplify tax procedure and considering various countries' tax procedures for adopting.

He said the government is considering a proposal to reduce sales tax from the present 15 percent.

He said the government is examining the existing sales tax rates prevailing in different countries in the region and added that after reaching a conclusion sale tax may be reduced in the next budget.

Shahid said the CBR has registered 7500 new sales tax payers in the first half of the current fiscal year, optimising the chances of exceeding this year's revenue collection.

He said Rs 250 billion sales tax target was set in the current budget of which more than half has been achieved despite the fact that businessmen and entrepreneurs having transactions under Rs 5 million are exempted from this tax.

He said the government is also considering the proposal of chambers to reduce sales tax rates which, if accepted, would further increase the compliance level. The government has already abolished various types of rates in the current budget and introduced one rate to facilitate the businessmen, he added.

Shahid said the CBR is pursuing a policy of partnership with the involvement of all stakeholders to develop confidence between taxpayers and government functionaries and different incentives given to taxpayers are part of this policy.

He asked members of Lasbela Chamber to come up with suggestions to make the procedure easier and simpler and to streamline the tax law, so that these could be incorporated in the next budget.

On problems of taxpayers at the hands of concerned department, he said there are Dispute Resolution Committees. If anyone has any problem, he should approach these committees to get his problem solved. The government has accepted almost all recommendations of these committees so far for the resolution of disputes between taxpayers and the department concerned.

About the record of distributors and wholesalers by manufacturers, Shahid said it is aimed at lessening the burden on manufacturers, as due to absence of any record of distributors and wholesalers, ultimate burden of tax falls on manufacturers, as unregistered distributors and wholesalers have millions of rupees turnover annually, but pay nothing to the exchequer.

On issuing of show-cause notices to taxpayers, he assured that the board would take care of these issues and would try its utmost to resolve this issue to avoid unnecessary and cumbersome litigation.

He said the CBR is extending all possible help to facilitate taxpayers and expressed the hope that they would reciprocate in the same manner by fulfilling their obligations.

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