Unilever urges Pakistan to start with VAT based e-invoicing

This is a first: Unilever Pakistan Limited has proposed to the ministry of finance to implement an electronic invoicing mechanism and to introduce a rebate of five percent given to companies as incentive to issue invoices electronically.

According to the budget proposals of the company for 2015-16, to curb the menace of flying invoices and inadmissible claims of input tax, electronic invoicing should be encouraged and a rebate of five percent should be given to companies as incentive to issue invoices electronically. This will create transparency.

Pilot of GST in non-VAT mode

The basic rate of GST is 17 percent; nevertheless the net revenue collection is still below 4 percent. Further, there exist distortions in the form of exemptions, zero rating and retail tax regime. These create hardships not only for the regulatory authorities in collection but also for the taxpayers in obtaining timely refunds. Hence, to simplify the process and curb false refunds, Unilever suggests sales tax be levied in a non-VAT mode wherein the rate should be 4% max without any adjustment of input tax.

As this may be too radical to be applied across the board, they suggest it be piloted in a few sectors like Tea. Another benefit of this would be reduction in consumer price of what is an essential everyday item of consumption of the masses.

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