ISLAMABAD: Pakistan’s Federal Board of Revenue has informed the National Assembly standing committee on Finance that 16 amendments have been made in the draft of the proposed new value added tax (VAT) bill after consultations with the stakeholders.
The draft bill was read to the committee and the members are expected to give their formal approval in the next meeting scheduled for May 4.
Official sources said here Saturday that the meeting was informed that under the amendments all the non-governmental organisation (NGOs) in Pakistan will be liable to pay 15 per cent of their margins on any commercial activity. The committee also reviewed 24 amendments proposed in the bill by the Senate standing committee on Finance and only 16 of them were accepted.
However, responding to queries of the members that if any NGO has rented space or building, what would be the mode of VAT, Ahmed said that the property rental is a service and it falls under the jurisdiction of provinces.
The committee was also informed that changes have been made in the clause that relates to arrest of defaulters. The original draft provided that FBR had the authority to initiate arrest of the defaulter but the amendment says that only a special judge is authorised to issue arrest warrants, Ahmed said, adding that the judicial magistrates for Inland Revenue would be responsible for VAT also.
He said that the penalties for tax frauds are lower in Pakistan compared to fines in many other developing and developed countries, adding that to bring retailers into the tax net, it is virtually impossible to forcefully determine annual turnover of any retailer operating in posh markets etc.