Govt committed to strengthening legal framework for tax on services: Minister

PESHAWAR: Finance Minister KP Taimur Saleem Khan Jhagra said on Wednesday strengthening the legal framework is one of the important areas of KP government reforms agenda.

He said this while addressing a session on the Khyber Pakhtunkhwa Revenue Authority and KP Sales Tax on Services bills, said an official handout.

The minister chaired a deliberation session to discuss and review the drafts KPRA and Tax on Services Bills. Prior to the 18th Constitutional Amendment, the Federal Board of Revenue (FBR) was responsible to collect Sales Tax on services on behalf of the provinces but Sales Tax on Services was collected by the provincial government under the Finance Act, 2013.

The KPRA was established in 2013 a corporate entity and is mandated for imposition, levy collection and administration of tax on services.

Currently, there is no separate legal framework which is creating bottlenecks and impacting the ability of the KPRA to collect provincial taxes.

The KP government has been undertaking various measures to meet the provincial needs through the formulation of a separate legal framework in the form of a KPRA Act and KP Sales Tax on Services (KPSTS) Act to enable KPRA to function as an autonomous public entity for the collection of sale tax on services.

The draft KPRA Law and KPSTS Law has been developed by the KP government with the technical assistance of the Sub-National Governance (SNG) programme.

The SNG team presented the salient features of the draft of KPRA law and KPSTS Law along with Secretary Finance Atif Rehman.

During the deliberation session, certain details and proposals for customization were put forward.

The finance minister asked the SNG to share the revised draft as soon as possible so that it may be expedited for the vetting by the Law Department.