LAHORE           -            Punjab Revenue Authority (PRA) will form a committee having representatives from the Lahore Chamber of Commerce & Industry and other organizations to bridge communication gap. Speaking at a ceremony at LCCI on Friday, PRA Chairman Zain-ul-Abidin Sahi has said the committee would have regular meetings so that policy decision could be made after due consultation with the stakeholders. LCCI President Irfan Iqbal sheikh, Senior Vice President Ali Hussam Asghar, Vice President Mian Zahid Jawaid Ahmad, former President Mian Muzaffar Ali and former Vice President Kashif Anwar also spoke on the occasion. Commissioner Enforcement PRA Shahzad Mehmood Gondal, LCCI Executive Committee members Wasif Yousaf, Sheikh Sajjad Afzal, Fiaz Haider were also present.

Chairman PRA said that an application has already been launched to have direct liaison with the taxpayers. He said that there was a lot of development on tax harmonization between the provinces. He said that a system was being designed under which a taxpayer would file a single return whether he/she was working in one or more than one provinces. “System will decide the tax segregation”, he said. He said that the provinces were expressing apprehension that it may affect the Ease of Doing Business Index therefore this system would be implemented sector wise. He said that telecom sector has been chosen in the first phase. He was optimistic that system would be working during the ongoing calendar year. To a question, Chairman PRA said that provincial taxes were already being collected through online banking channels while facilities of credit and debit cards would also be available soon. He said that uniformity in sales tax in all provinces was very difficult. He said that Punjab Infrastructure Development Cess (PIDC) could not be abolished but a middle way could be found in consultation with the stakeholders. “We want to bring down the frequency of litigation”, he said. He said that the authority was performing well by registering over 23 percent revenue growth in the first six months of ongoing fiscal year despite economic slowdown.

Irfan Iqbal Sheikh said that services sector was the most important sector of the economy with a share of around 61% in the GDP. Service providing industries which have a reasonable contribution in the GDP should be given the benefit of concessionary tax rate, he said. He said that there was a dire need of harmonization among the provincial and federal tax collecting agencies. “If a service provider is in Punjab and the recipient is in Sindh, then he was required to deposit sales tax with PRA. “However, the service recipient still remains liable to sales tax recovery by Sindh Revenue Board (SRB) under Sind Sales Tax Services Act 2011, and vice versa”, he said. In this regard, provincial revenue authorities should agree on jurisdictions and common rules. Issues of ‘origin’ and ‘consumption’ on services should also be clarified. He said that currently revenue collections of Punjab fall under Punjab Revenue Authority, (PRA), Excise & Taxation and Board of Revenue. To enhance the ease of doing business in Punjab, the responsibility of collecting all tax revenues should be given to PRA, he said. He said that sales tax on services was being charged at different rates by Sindh Revenue Board (SRB) and Punjab Revenue Authority (PRA) which creates an environment of competition among the provinces. Uniform rate of Sales Tax should be charged by all the provinces. The high tax rates in Punjab results in shifting of various services providing industries to other provinces. He said that Imposition of Punjab Infrastructure Development Cess (PIDC) has further burdened existing taxpayers instead of broadening tax net. “PIDC is an indirect tax as it is being charged on movement of goods including raw materials and has proved to be an impediment to economic growth of the province. Business people have started clearing their consignments in other provinces to avoid this tax which would ultimately hurt businesses of clearing agents and transportation companies that provide employment to thousands of people and contribute sizeable amount to national exchequer. We firmly believe that PIDC Act is causing huge net revenue losses to provincial kitty. In this regard, you are requested to please take up the matter personally for the withdrawal of said cess to give relief to the business community”, he said. He added that frequency of taxes needs to be reduced. Filing of returns of Sales Tax on Services should be allowed on quarterly/six monthly basis. All payments related to PRA should be accepted through credit card/debit card, direct debit or using internet banking.