Parliament has withdrawn proposed mandatory tax identification number (TIN) requirements for several public services while tightening business identification number (BIN) requirements for a wider range of commercial activities under the Finance Act.
The changes were approved on Monday when Parliament passed the Finance Bill with 64 amendments, revising several provisions in the proposed budget.
The government dropped its proposal to require a TIN for opening bank accounts, registering inheritance deeds and completing property mutations.
The National Board of Revenue (NBR) had proposed the measures to broaden the tax base and improve taxpayer identification.
However, businesses, tax practitioners and citizens argued that requiring a TIN for routine banking and property-related services would burden millions of people with no taxable income.
The withdrawal exempts those people from mandatory tax registration while leaving existing obligations unchanged for taxpayers already required to obtain a TIN.
The Finance Act, however, tightened compliance requirements for businesses.
It made BIN registration, or proof of VAT registration, mandatory for opening and operating current and STD accounts, obtaining bank and financial institution loans, renewing trade licences, securing electricity and gas connections, opening merchant accounts with mobile financial service providers, joining or renewing memberships of trade bodies and registering business-owned vehicles.
The Act also strengthened indirect tax enforcement. Manufacturers, importers, suppliers, distributors and commission agents must collect 0.2 per cent advance income tax on sales to retailers. Those failing to do so will be liable to pay an equivalent amount themselves.
Registered VAT entities have been allowed to file VAT returns after every three tax periods instead of every tax period.
