National Tax Council meets to discuss tax reforms, harmonisation

[Business Recorder]

National Tax Council meets to discuss tax reforms, harmonisation

Finance minister Muhammad Aurangzeb chaired on Wednesday a meeting of the National Tax Council (NTC), which brought together key federal and provincial stakeholders to discuss critical matters related to tax reforms and harmonisation, the Finance Division said in a statement.

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

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According to details, 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:

• Data sharing and tax digitisation: strengthening information-sharing mechanisms between the Federal Board of Revenue (FBR) and provincial revenue authorities, leveraging advanced tools for data analysis, and implementing digital solutions to streamline tax collection.

• ⁠Harmonisation of GST: advancing efforts to harmonise the General Sales Tax (GST) across provinces and transitioning to a unified tax portal for better efficiency and transparency.

• ⁠Provincial tax reforms: reviewing measures to enhance agricultural income tax and property taxation, ensuring alignment with federal policies while addressing existing challenges.

• ⁠Broader tax base: exploring strategies to transition GST on services to a broader framework, aligning with international best practices to minimise ambiguities and improve administration.

The council emphasised the importance of cohesive policy implementation, capacity building, and robust stakeholder engagement to achieve sustainable reform goals.

Finance minister 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, the statement read.

Govt has no room for complacency, says Aurangzeb

On Monday, Aurangzeb said there was no room but to stay the course of reform agenda to ensure it was the last International Monetary Fund (IMF) programme, as well as long-term economic development.

“The key message by the multilateral and bilateral partners, as well as, local think-tanks for Pakistan is to stay the course of reform agenda including taxation, energy and state-owned entities (SOEs), as well as, public finances,” said the minister, while briefing the National Assembly Standing Committee on Finance.

The IMF Executive Board approved the 37-month, $7-billion Extended Fund Facility for Pakistan in September this year. The first review of the country’s reforms is due in the first quarter of 2025.

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