NTC tasked to devise uniform taxation policies

ISLAMABAD: The establishment of National Tax Council (NTC), which is being delayed to become fully functional due to coronavirus outbreak, has been mandated for harmonisation of GST on both goods and services among the Centre and the provinces from upcoming budget. In the aftermath of 18th Constitutional Amendment, the NTC was agreed among the Centre and the provinces but so far it remained unable to convene its maiden meeting. Ironically, the upcoming budget, expecting to be presented in the first week of June 2020, is being formulated on the basis of the old NFC Award because it can hardly reach a consensus on the new award after the ninth NFC had already lapsed recently.

However, the NTC was delayed to become fully functional because it could not be decided whether it would function under the jurisdiction of Council of Common Interests (CCI) or into the domain of National Finance Commission (NFC) secretariat. The harmonisation of GST is part of the World Bank’s budgetary support loan of US$750 to US$900 million.

Under the harmonisation process, the Centre and provinces will make efforts to evolve a consensus on uniform tax return, single GST rate and other requirements for both goods and services, so the taxpayers will have to file single return instead of filing five separate returns on monthly basis; one at the federal level into FBR and four in respective federating units. One top official of Finance Division confirmed to ‘The News’ on Tuesday that the National Tax Council was established but it could not become formally functional probably after the pandemic.

This scribe contacted an FBR official on Tuesday, who said when the NTC evolves a consensus, then the Finance Bill 2020 would incorporate changes for moving towards the unified GST regime for both goods and services, and it would be a major step towards harmonisation of taxation system in Pakistan in the aftermath of 18th Constitutional Amendment.

This scribe contacted the Punjab Revenue Authority’s (PRA) official, Zain-ul-Abidin Sahi, who said the NTC could not hold its formal meeting because it required hours' long deliberations to strike a consensus on all issues related to harmonisation of GST on goods and services. He said it was the major objective of NTC to evolve a consensus on harmonisation of taxes among all stakeholders.

To another question regarding revenue collection of PRA in the current fiscal year, Sahi said it had envisaged collection target of Rs166 billion and so far they had collected Rs82 billion. After the COVID-19 outbreak, it would not be possible to achieve the desired target.

Commenting on the negative impact, he said it would be premature to assess it now because the date for filing the GST return for March was extended up to April 30, so the exact figures could only be determined when April returns would be available with us. The Centre and the provinces in March 2020 had agreed to set up the National Tax Council to devise uniform taxation policies – a major development that would pave the way for the approval of two budgetary support loans worth US$750 million by the World Bank.