The Federal Board of Revenue has been assigned the onerous task of implementing and monitoring the new tax incentives scheme recently announced by Prime Minister Nawaz Sharif. The incentives scheme comprises a slew of measures designed to broaden the tax base and stimulate investment in the country. These include exemption from penalties, default surcharge and detailed audit for those bringing themselves in the tax net voluntarily as well as the first-time tax payers. Additionally, anyone paying 25 percent more tax as compared to the previous year would be given exemption from detailed audit. The government has also barred FBR from accessing the bank accounts of tax payers. On the other hand, to encourage investment, those making investing in the selected fields would not be asked any questions about their source of income.
Experience shows that such schemes in the past failed due to lack of necessary and targeted follow-up action. To ensure that the scheme this time yields the desired results, a detailed plan has been prepared by the Finance Ministry and FBR has been made responsible for its execution. The basic purpose of the scheme is to facilitate the public in availing the various facilities offered by the government.
The detailed plan with which FBR has been saddled is an elaborate one. It envisages the establishment of PM’s tax Incentives Scheme Counters in every tax office, specially at the level of Deputy Commissioners and above, and notification of “focal persons” at the Commissioner’s office with due publicity in the press and on FBR website. Also on the cards is the creation of a web-based portal facilitating new taxpayers in registering themselves and making online payments, together with the establishment of a Complaint-Registration-and-Redress system on FBR website. FBR has also been tasked with publicizing the scheme in the media and holding seminars and workshops with the participation of representatives of chambers of commerce and industry to explain the features of the package and respond to queries from the public. Last but not the least, a Central Monitoring Office is to be established in the FBR Headquarters to ensure that the scheme is administered in an effective manner. FBR is not only required to monitor the implementation of the scheme but also to keep the Finance Ministry informed through weekly reports.
It is a tall order, and FBR will have to move fast to show results expected of it. Following the directive from the government, FBR has reportedly established a committee to ensure the implementation of the scheme at the level of the Board and field formations. But this is not enough. Bureaucracy moves at a snail’s pace and committees are notorious for burying issues in the sands of time. Given the gravity of the situation, the FBR chairman should personally supervise the work of the special committee on a daily basis to see that the steps detailed in the plan are given concrete shape at the earliest. Time is of the essence in the matter. Already we are half way through the financial year. A public awareness raising campaign should be launched immediately to publicize the benefits of the incentive scheme and motivate the people to fulfill their tax obligations towards the State.
