KPRA and AG Office Collaborate for Tax Compliance

The Director General of the Khyber Pakhtunkhwa Revenue Authority (KPRA) recently held a meeting with the Accountant General of Khyber Pakhtunkhwa to address concerns regarding the withholding of Sales Tax on Services from bills processed through the AG office. It was highlighted during the meeting that the exemption for the former Federal Administered Tribal Area (FATA) and Provincial Administered Tribal Area (PATA) had expired, leading to the application of sales tax on services in these regions.

As a result of the discussion, the AG office was directed to ensure the proper withholding of sales tax from bills related to FATA and PATA. Additionally, both entities agreed to facilitate data sharing, requiring a formal written request for the exchange of information. To promote transparency and prevent misuse, KPRA now uploads exemption letters and clarifications on its website, serving as a verification platform for claimed exemptions.

To streamline processes and enhance accuracy, the KPRA and AG office teams will collaborate to integrate case-to-case exemptions granted by KPRA into the AG Office Financial Accounting and Budgeting System (FABS). A strict policy was also established mandating the inclusion of appropriate sales tax in bills related to services, with plans for complete integration of SAP and FABS.

The Director General of KPRA expressed appreciation for the cooperation of the AG office, emphasizing the significance of this collaboration in boosting revenue for KPRA. In response, the AG pledged full support from his team to contribute to the prosperity of the province.

The partnership between KPRA and the AG office marks a significant step towards ensuring sales tax compliance in FATA and PATA regions. By enhancing transparency, streamlining processes, and promoting data sharing, both entities aim to strengthen revenue collection efforts and foster economic growth in Khyber Pakhtunkhwa.