Tax Talks

ISLAMABAD: National Tax Council (NTC) Wednesday reviewed provincial tax reforms including measures to enhance agricultural income tax and property taxation.

A meeting of the NTC was held here on Wednesday at the Finance Division under the chairmanship of Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb. It brought together key federal and provincial stakeholders to discuss critical matters related to tax reforms and harmonization.

The meeting was held in the context of the recently signed National Fiscal Pact between the federation and the provinces, emphasising the need for realising the full tax potential from under-taxed sectors, particularly real estate, property, and agricultural.

Officials informed that the NTC was unanimous to expedite enactment of provincial agriculture income tax laws by the respective provincial governments. Punjab has already enacted the law. The law has been approved by the KP’s cabinet and its placement in assembly is awaited.

The law has also been approved by the provincial government of Balochistan on November 11, 2024 and its placement in assembly is awaited.

In case of Sindh, the work and preparations on the amended law has already been done.

The meeting was attended by Ali Parvez Malik, the Minister of State for Finance & Revenue; Mian Mujtaba Shuja-ur-Rehman, the Finance Minister of Punjab; Muzzamil Aslam, the Finance Minister of KPK; Mir Shoib Nausherwani, the Finance Minister of Balochistan; Chairman FBR, chairmen of Provincial Revenue Boards, and the Federal and Provincial Finance Secretaries. Additionally, experts from the World Bank and senior officials from Finance Division and provincial finance departments were also present.

The agenda of the meeting focused on fostering collaboration between federal and provincial authorities to enhance tax systems, improve compliance, and boost revenue collection. Key discussions revolved around: 1. Data Sharing and Tax Digitization: Strengthening information-sharing mechanisms between FBR and provincial revenue authorities, leveraging advanced tools for data analysis, and implementing digital solutions to streamline tax collection.

1. Harmonization of GST: Advancing efforts to harmonize the General Sales Tax (GST) across provinces and transitioning to a unified tax portal for better efficiency and transparency.

2. Provincial Tax Reforms: Reviewing measures to enhance agricultural income tax and property taxation, ensuring alignment with federal policies while addressing existing challenges.

3. Broader Tax Base: Exploring strategies to transition GST on services to a broader framework, aligning with international best practices to minimize ambiguities and improve administration.

The Council emphasised the importance of cohesive policy implementation, capacity building, and robust stakeholder engagement to achieve sustainable reform goals. Participants acknowledged the potential of these measures to support national fiscal stability and promote equitable growth.

The Federal Minister for Finance and Revenue reiterated the government’s commitment to fostering collaboration among all stakeholders for a unified and efficient tax framework.

The meeting concluded with actionable steps to advance the discussed reforms in a timely manner.

Source: Business Recorder, 2024