ISLAMABAD: The Federal Board of Revenue (FBR) has called on Inland Revenue field formations and the business community to submit proposals related to income tax, sales tax, Federal Excise Duty (FED), and ICT (Tax on Services) Ordinance, 2001, for the fiscal year 2025-26. These proposals aim to bring the entire value chain of businesses into the sales tax regime, promote progressive taxation, and eliminate concessions and exemptions.
The FBR has set a deadline of January 31, 2025, for submitting these proposals. Notably, the FBR has refrained from seeking proposals related to tax concessions, reductions in higher tax rates, or new exemptions in income tax, sales tax, or FED.
In its directive issued Wednesday, the FBR emphasized the importance of enhancing the budget formulation process and minimizing procedural burdens by starting the process earlier than usual. The proposals will contribute to the development of the Finance Bill 2025, leveraging stakeholder expertise to refine tax policies and ensure efficiency.
The FBR has outlined several key focus areas for proposals:
- Broadening the tax base to include wider participation in revenue generation.
- Bringing the entire business value chain into the GST regime.
- Introducing measures to promote progressive taxation, ensuring higher taxes on affluent classes.
- Phasing out tax concessions and exemptions under all tax laws.
- Simplifying tax laws to facilitate taxpayers and enhance the ease of doing business.
- Reducing tax arbitrage opportunities to improve economic efficiency by adhering to taxation neutrality.
- Addressing tax distortions, procedural lapses, and anomalies.
The FBR stressed that the identified areas are illustrative and not exhaustive. Proposals should be clear, actionable, and suitable for implementation through amendments to existing tax laws.
The business community and field formations are urged to provide meaningful suggestions by the stated deadline to contribute to the comprehensive development of the FY2025-26 budget, the FBR added.
