The Federal Board of Revenue (FBR) has decided in principle to move towards replacing the existing General Sales Tax (GST) with Value Added Tax (VAT) across the board for all sectors under the World Bank-funded loan conditions.
Government decided to replace Sales Tax with the Value Added Tax in the country as a part of its structural adjustment program which was undertaken to correct anomalies & distortions both in our tax & non-tax regimes. Accordingly, new enactment titled Sales Tax Act 1990 replaced Sales Tax Act 1951 with effect from 1-11-1990.
FBR Chairman Shabbar Zaidi said that the board will ultimately move towards full implementation of VAT in order to ensure all sectors contribute to the country’s taxation system. He said that the CNIC condition was a move towards implementing the VAT and FBR stood firm on it, said the report.
It is relevant to mention here that the efforts made by FBR in the past to put in place VAT had miserably failed and once it had resulted in a suspension of the International Monetary Fund (IMF) sponsored program during the Pakistan Peoples Party-led regime in 2011.
The FBR will also finalize stages and complexities in each product value chain with time and resources for VAT assessment surveys of particular industrial or business segment.
