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Plea to change GST nomenclature as simplified turnover tax

RECORDER REPORT

KARACHI: The Pakistan Small Chamber of Commerce and Cottage Industries (PSCCCI) has suggested change of nomenclature of General Sales Tax as "simplified turnover tax" (STT).

Chairman PSCCCI Bashir Miandad, said that the business community specially small traders have never refused to pay taxes. What they are objecting to is its modus operandi. They are waiting for and looking forward to an easy and do-it-yourself (DIY) system. To achieve this, PSCCCI has suggested the following:

Ñ All the retailers who have a maximum per year turnover of Rs. 1 million should be exempted from tax, establish a category of retailers who have a per year turnover of above Rs. 1 million and finish off with the previous category of Rs. 5 million and all the retailers should also be given audit inspection exemption.

Ñ Establish a joint collaboration between market associations and concerned sales tax authorities.They would conduct joint market inspections to diagnose the loopholes in the system and take legal action against tax evaders and defaulters. The foremost advantage of the joint survey would be that it will lessen the harassment and corruption.

Ñ Divisional/city committees should be formed to clarify and rectify all the disputes and controversies regarding the STT. The divisional/city committee will have maximum five members. These members include representatives from the sales tax collectorate and trade bodies. It will have one chairman and four members. All the divisional/city committee would work and operate under the supervision and monitoring of the concerned sales tax collectorate.

In the STT system every retailer will be bound to pay taxes on self-assessment basis without documentation within a period of 45 days and/or quarterly 90 days basis. All the retailers under the system of STT should have to pay the tax at the rate of minimum 0.50 percent and maximum one percent on the retailers who have the turnover above Rs. 1 million.

Ñ The retailers who will not pay their taxes and termed as evaders and defaulters will have to pay the penalty at the rate of 0.25 percent extra, government should withdraw the 3 percent additional charge currently on the person not registered under the invoice based GST system, the STT should be given a complete legal cover by amending the sales tax act 1990, and allot separate code number to all the tax payers.

Ñ Establish a separate department in the Central Board of Revenue (CBR) with the object to handle and solve the problems of retailers regarding the tax collection and implementation of STT, separate tax collection account of revenues, which will be collected from STT, should be maintained so that the correct figure of revenue collection is ascertained.

Ñ The STT will have to be implemented for a period of 3-5 years. It will increase the tax net, generate maximum revenue for the Government of Pakistan, and lessen the burden of people who are already paying the taxes.