Tax Payers Alliance Pakistan (TPAP), an initiative of economic think tank PRIME, submitted budgetary sales tax proposals to the Revenue Division/Federal Board of Revenue (FBR) in Pakistan for the upcoming Finance Bill 2024.

The proposal was developed by TPAP Team: Mr. Anas Farhan, Vice President ZTBL & PRIME Research Fellow from Islamabad, Mr. Usman Azmat, Advocate High Court from Lahore and Ms. Sehrish Naz, Economic Analyst FPCCI from Karachi, in consultation with the TPAP’s members comprising of a group of tax experts from across Pakistan, including representatives of Salaried Class Alliance (SCA) Mr. Shameer Muhammad Haroon, Member ICAP and Mr. Amer Sharif, Assistant Manager Treasury KAPCO. Subject proposal is aimed at simplifying tax regulations and reducing the compliance burden on taxpayers. This proposal aims to create a fairer and more efficient tax system in Pakistan that can provide sustainable funding for public expenditures.

According to experts, existing sales tax rate of eighteen percent is too much high and Government must consider to bring it down to single digit. Therefore, they have proposed a rate of nine percent for Budget 2024-25. Adjustment of input tax by some sectors of economy has also become complex and challenging, therefore it should also be simplified. Experts have proposed zero-rate sales tax on medicines. According to them, these life-saving items are out of reach of common man due to extraordinary sales tax thereon. Tax experts also highlighted to implement automated refund processing across the board instead of this facility to only few sectors, giving rise to discriminatory treatment. Existing sales tax withholding regime is also creating nuisance and distortion, therefore experts have proposed revamping it altogether.

Overall, TPAP’s proposal is a crucial contribution to the ongoing debate on sales tax reform in Pakistan. It provides a well-argued and clear case for a simpler, fairer, and more efficient tax system that could benefit both taxpayers and the wider economy initiative.