The rate of the new VAT would be finalised in consultation with the provinces. When asked whether new rate of VAT would be 15 percent, a senior FBR official said that the rate has yet to be finalised. In consultation with the provinces the new rate of VAT would be finalised. However, the rate of the VAT would be definitely lower than the existing sales tax rate of 16 percent with no exemption.
The international conference on the VAT is scheduled to be held from December 6 to 8 at Dubai. In Dubai, the World Bank (WB) would also review the Tax Administration Reform Project (TARP). The VAT draft legislation was prepared which would be tabled in the conference.
The VAT draft legislation would be made public after giving final shape in the upcoming conference for placing before the parliament by December 31, 2009 for formal approval. However, the draft would be duly shared with the representatives of the provincial governments at Dubai before its presentation to the Parliament.
The legal and constitutional framework has been finalised for drafting the new law. In this regard, six laws for federal government, four provinces and Islamabad Capital Territory has been drafted in full harmonisation and with active involvement of all the stakeholders.
Meanwhile, the FBR has provisionally collected tax around Rs 84 billion during November, 2009 against the target of nearly Rs 91 billion, reflecting a shortfall of Rs 7 billion. Sources said that the provisional collection has improved from Rs 81 billion to Rs 84 billion during November 2009.
The revenue collection would further improve following compilation of November's final figures. The tax collection figures from far flung areas would help in improving collection in November 2009. Breakup of target of Rs 91.3 billion for November 2009 revealed that the target for direct taxes has been fixed at Rs 32 billion, sales tax Rs 35 billion, Federal Excise Duty Rs 11 billion and target of customs duty has been fixed at Rs 13.3 billion.