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FBR Calls for Innovative Tax Reform Proposals for Pakistan’s 2024-25 Budget

FBR Calls for Innovative Tax Reform Proposals for Pakistan’s 2024-25 Budget

Karachi, February 24, 2024 – The Federal Board of Revenue (FBR) has launched an initiative urging Inland Revenue (IR) offices to develop new and innovative strategies to enhance revenue collection and effectively tax underrepresented sectors. In a recent notification, the FBR seeks proposals for improving inland taxes, including income tax, sales tax, federal excise, and Islamabad Capital Territory (ICT) sales tax on services, for the forthcoming 2024-25 budget.

This directive specifically requests the IR offices to focus on amending key legislations such as the Income Tax Ordinance, 2001; Sales Tax Act, 1990; Federal Excise Act, 2005; and ICT (Tax on Services) Ordinance, 2001. The goal is to broaden the tax net and increase revenue from sectors that are currently under-taxed.

Proposals are expected to cover various taxation aspects, such as combating tax avoidance, plugging revenue leakages, broadening the tax base, correcting procedural errors, removing outdated provisions, and simplifying existing laws and regulations. These measures aim to ease the process for taxpayers.

A crucial aspect of this initiative is the clarity, relevance, and practicality of the proposals. The FBR emphasizes that suggestions should be actionable and consider the impact on all stakeholders, including trade groups that might be negatively affected.

The deadline for submitting these proposals is March 11, 2024, allowing IR offices sufficient time to assess the current tax system, identify gaps, and develop strategies to include untapped areas in the tax framework. The FBR’s objective is to establish a more equitable and efficient taxation system by leveraging the expertise of tax officials and specialists.

This call for proposals is in line with the government’s commitment to fiscal responsibility and sustainable economic growth. By encouraging tax authorities to innovate and proactively tackle revenue collection challenges, the FBR aims to strengthen Pakistan’s financial stability and ensure equitable contributions from all sectors of the economy.

As submissions are received and reviewed, the FBR faces the task of carefully evaluating each proposal, considering its potential economic impact. The anticipated result is a set of well-considered amendments and actions that will not only boost revenue but also promote a more transparent and accountable tax system in Pakistan.