The FBR during the financial year 2013-14 embarked on an exercise of review and rationalisation of concessionary regime. During the budget speech for financial year 2013-14, Finance Minister had highlighted the complexity of the tax system resulting from discriminatory exemptions and concessions. It was also emphasised that these exemptions result in enormous cost to the exchequer. Finance Minister stressed upon the need to provide level playing field to trade and industry by abolishing the culture of SROs. The Minister announced setting up a High Level Committee to be chaired by Chairman FBR for the purpose of reviewing the concessionary SROs. The mandate of the High Level Committee was review of existing concessionary regime for minimisation of exemptions; elimination of discriminatory exemptions and concessions; and simplification of tariff structure to provide level playing field for trade and industry.
The Committee decided to adopt a phased approach for accomplishing the task. Accordingly during the Budget 2014-15. FBR was able to withdraw concessions of Rs 105 billion during the first phase and concessions amounting to Rs 108 billion were withdrawn during the second phase (during FY 2015-16). In the third and final phase to be completed through Budget 2016-17, the FBR has committed to withdraw concessions/exemptions amounting to 0.3% of GDP.
Chairman FBR has desired that the preparatory exercise for the third phase may be taken up in right earnest as the meeting of the High level Committee is expected by the end of the next week. It has therefore been decided to hold an in-house meeting on 13th January 2013 in the Committee room on third floor of FBR house. Chairman FBR will chair the meeting and review the proposals regarding withdrawal of concessions/ exemptions relating to Customs duty, income tax, sales tax and federal excise duty, sources added.