PRIME Sales Tax Proposal For Federal Budget 2023-24
The Policy Research Institute of Market Economy (PRIME) has proposed a sales tax plan for the Federal Budget 2023-24. The proposal aims to address the regressive taxation system that results from keeping sales tax rates on the higher side. The plan suggests that a maximum sales tax rate of 5% should be fixed with no input/output adjustment, which would be ideal for sustainable long-term growth.
The proposal also focuses on broadening the tax base through a simple withholding sales tax (SWHT) regime. The current Eleventh Schedule of the Sales Tax Act, 1990 has ambiguity with regard to active tax payer suppliers, and separate SWHT rates on some supplies and supplier categories are not just justified. PRIME recommends simplifying the SWHT regime to achieve broad, predictable, low-rate taxes.
For more details on the PRIME Sales Tax Proposal for federal Budget 2023-24, please refer to the attached document link