Formulation of Inland Revenue Code Unlikely by This July

The Federal Board of Revenue (FBR) might not be able to combine Income Tax Ordinance, 2001, Sales Tax Act, 1990, and Federal Excise, 2005 by July 1, 2022.[simple_tooltip content=’This is the content for the tooltip bubble’]This triggers the tooltip[/simple_tooltip]

At the conclusion of the meeting on the formulation of the Inland Revenue Code at the FBR Headquarters held here on Saturday, a participant told Propakistani that the discussions continue on the simplification of the Inland Revenue Code, but apparently the same might not be enforced from July 1, 2022.

It is a very complex process to harmonize the Income Tax Ordinance, 2001, Sales Tax Act, 1990, and Federal Excise, 2005. There are also Income Tax Rules, 2002, the Sales Tax Rules, 2006, the Federal Excise Rules, 2005, and the Islamabad Capital Territory (Sales Tax on Services) Rules, 2001. The harmonization and simplification of these laws would change the languages of the Income Tax Ordinance, 2001, Sales Tax Act, 1990, and Federal Excise, 2005.

Therefore, it is a complex process to redraft all laws or combine the same. It would also need more time for the stakeholders to understand the revised, combined, or simplified law.

Chairman Federal Board of Revenue (FBR) Dr. Muhammad Ashfaq Ahmed, Saturday, reviewed the progress on the formulation of the Inland Revenue Code. In this regard, the FBR Chairman has convened a meeting with the expert team of drafters at the FBR Headquarters.

The FBR wanted to enforce a new harmonized and simplified Inland Revenue Code from July 1, 2022, combining Income Tax Ordinance, 2001, Sales Tax Act, 1990, Federal Excise, 2005, and Islamabad Capital Territory (Sales Tax on Services) Ordinance, 2001. However, sources said that it would take some time to finalize the said exercise.