ISLAMABAD: Board of Investment along with Federal and Provincial stakeholders has developed a comprehensive plan for improving business climate in the country. The focus of plan is on six indicators of business including starting a business, paying taxes and trading across the borders.
BOI has submitted this taxation action plan to Federal Board of Revenue for improving business climate in Pakistan by interconnecting shipping lines, transporters and regulatory agencies for customs clearance from a single window, legal changes in tax laws and policy amendments in fiscal laws, integration of IT functions and modernization of tax administration. BOL and FBR will also jointly work on a plan for improving the port infrastructure in Karachi to facilitate investors and importers.
The role of the FBR in these indicators is very crucial and FBR has done a lot of tangible work to improve Pakistan’s international ranking in these indicators. It is heartening to inform that the progress on ‘Starting a Business’ is well on time and Virtual One Stop Shop (VOSS) has been set up. Minister for Finance has also been requested to formally inaugurate the initiative, sources said.
To make progress on remaining 2-indicators, paying taxes and trading across borders, there is a need to develop a strategic implementation plan based on the consensus Action Plans to further elevate Pakistan’s ranking. Sources said that the BOI would also hold a meeting with Chairman and relevant officers of FBR, BOI and Finance Division on these indicators to strategize implementation planning under leadership of FBR Chairman. The BOI and the FBR teams will sit together to develop an implementation action plan to meet the timelines.
According to the action plan for improving business climate, modernizing tax administration is one of the key policy measures. Under the action plan, it is proposed to complete risk criteria and create risk profiles to guide the scope and focus of taxpayer audits. Modernizing the tax administration making it result- oriented, including performance reporting and monitoring tools with Key Performance Indicators by December 2015. To improve taxpayer compliance and broadening the tax base, it is proposed to train, certify and regulate qualified tax accountants to help small enterprises with tax compliance.
It is proposed to provide updated online guides on preparation, filing and payment of tax processes and requirements. Conduct a taxpayer perception and compliance survey to assess improvement from previous survey. The survey should help identify gaps in existing business processes and estimate the compliance cost for taxpayers across income ranges. It is also proposed to enhance human capacity at the facilitation centers and PRAL, enabling them to provide direct, personalized and timely guidance to taxpayers on compliance.
It is also proposed to complete training for LTO and RTO staff to improve taxpayers’ knowledge, and effectively use available data to monitor compliance, and take informed actions. Another proposal is to introduce formal mechanism to better co-ordinate GST filing deadlines. It is proposed to simplify tax legal texts to improve clarity, transparency and reduce discretion. The process streamlining and system automation has been proposed to reduce discretion, make it simpler, easier and quicker for both taxpayer and administrator. It is proposed to enhance tax portal capacity and extend network connectivity across the country to help increase usage of We BOC and IRIS systems.
It is also proposed under the plan to put in place We BOC across the country. It is proposed to review, simplify and streamline existing processes and forms to encourage tax compliance. It is also proposed to complete the integration of end-to-end IT solution: IRS, which covers all business processes for Inland Revenue, income and sales tax. The system should be ready for timely launch every year filing.
Under the BOI taxation plan, it is also proposed to put in place a Data Warehouse and business intelligence system to better inform policy decisions. There is a need to develop protocols, roles and responsibilities for data sharing and process co-ordination between federal and provincial tax authorities. It is also proposed to widen data collection to include 3rd party data sources. Re-construct a state of the art Data Centre, as existing centers will be out of warranty by June 30, 2016.
It is also proposed to integrate and connect the We BOC system to additional regulatory bodies such as the State Bank of Pakistan, National Tariff Commission, Drug Regulatory Authority, Ministry of Commerce, Ministry of Interior, and the Plant Animal Quarantine Department.
It is also proposed to introduce coordinated and non-intrusive cargo inspection techniques. It is proposed to implement a robust risk management system at the new Directorate set up for this purpose. Under the BOI plan, the FBR will submit a plan for implementing a Sing Window for customs clearance where shipping lines, transporters, and regulatory agencies are interconnected. It is proposed to submit a plan for improving the port infrastructure in Karachi; improve the capacity of KPT staff and develop a We BOC module for commercial banks to issue Form “E” (Foreign Exchange).
