- The mandate of the NTC will be expanded to include property tax.
- Unified rates on cards for harmonization of GST on goods and services.
- Adjustments to the ICA regimes were considered to align them with Federal Persona.
ISLAMABAD: The National Tax Council (NTC) has decided to table amendments to the Agricultural Income Tax (AIT) legislation in provincial assemblies after failing to reach an agreement on harmonization of tax rates on products and services (GST) as well as on the unification of property taxes under a single regime.
The NTC aims to present a draft negative list of GST on services by January 1, 2025.
Although the Federal Board of Revenue (FBR) considered the implementation of unified GST returns for mobile operators (CMOs) to be a major success, their input adjustments still faced challenges. The unified GST reporting format for the entire telecom sector is still far from being achieved.
However, regarding the ACI legislation, the Finance Ministry argued that the International Monetary Fund (IMF) has so far not raised any questions on Punjab’s ACI legislation, where no specified rate was incorporated into the amended ICA Act.
Sindh has taken the stand that the Sindh Revenue Board (SRB) has prepared its amendment bill and it will be a political decision to present it to the cabinet and table it before the provincial assembly.
Khyber Pakhtunkhwa and Balochistan have also committed to present it in the assemblies before the deadline of January 1, 2025. Regarding the harmonization of GST on goods and services, it was decided that the unified rates would be introduced, so that the NTC executive committee will do so. deliberate further to finalize its terms.
Concerning the negative list of GST on services, it will move from positive list to negative list and will be implemented from July 1, 2025. However, the first project will be presented to the CNT until January 2025.
The FBR and the provinces had sharp differences on finalizing the GST negative list on services as the view persisted within the FBR that there would be many areas where the provinces could encroach into the domain of the Center by replacing the positive list with the negative list. .
When contacted, KP Finance Minister Muzzammil Aslam said this was the first meeting of the NTC after almost 18 months when it was promised to hold meetings frequently, at least one meeting each quarter.
The sources indicated that the meeting discussed the modification of the Agricultural Income Tax (AIT) regimes to fully align them, through necessary legislative changes, with the federal personality from January 1, 2025, with the collection for the second half of the agricultural income of the financial year 2024-25 in July. 2025.
It also aims to shift GST on services from a positive list approach to a negative list approach to combat tax evasion, which would come into force from the start of the financial year 2025-2026, in the purpose of collectively collecting revenue from agricultural corporate tax and GST on services combined with provincial tax. efforts to expand new areas of revenue collection, develop, implement and collect revenue under a common approach to property taxation, implement reforms to reduce compliance gaps tax, including GST.
The mandate of the NTC will be expanded to include property taxes and the legal and administrative changes necessary to implement them.
According to an official statement issued by the Federal Ministry of Finance on Wednesday, a meeting of the NTC was held at the Finance Division under the chairmanship of Federal Minister of Finance and Revenue, Senator Muhammad Aurangzeb.
The meeting brought together key federal and provincial stakeholders to discuss critical issues related to tax reforms and harmonization. The meeting was held in the context of the recently signed National Fiscal Compact between the Federation and the provinces, highlighting the need to realize the full fiscal potential of undertaxed sectors, particularly real estate, land and agricultural income.
The meeting was attended by Minister of State for Finance and Revenue Ali Parvez Malik, Punjab Finance Minister Mian Mujtaba Shuja-ur-Rehman, KP Finance Minister Aslam, Minister of Balochistan Finance, Mir Shoib Nausherwani, Chairman FBR, Chairmen of Provincial Revenue Boards and Federal Government. and provincial finance secretaries.
In addition, experts from the World Bank and other senior officials from the Finance Division and provincial financial departments were also present.
The NTC stressed the importance of coherent policy implementation, capacity building and strong stakeholder engagement to achieve sustainable reform goals. The Minister of Finance reiterated the government’s commitment to fostering collaboration between all stakeholders for a unified and effective tax framework.
Originally published in News