ISLAMABAD: The Federal Board of Revenue (FBR) has devised a comprehensive programme to enhance resource mobilization efforts in the country and increase tax to GDP ratio to 10-15 percent in the next few years.
According to sources FBR has taken the following initiatives for overall improvement in the tax system:
- Broadening of Tax Base: for broadening of tax base has taken several initiatives including use of third party data. Initially, the objective is to incorporate 300,000 new taxpayers. In this regard more than 200,000 notices have been issued by June, 2015 and more notices will be issued in FY 2015-16.
- Rationalization of SROs and tariff rationalization: In order to remove distortions and discrimination in tax structure and to abolish unnecessary concessions.
- Withdrawal of Power of Issuing SROs: The power to issue concessionary SROs by FBR has been withdrawn by the Act of Parliament. Economic Coordination Committee (ECC) has the power to issue the SROs but only under limited circumstances.
- Increasing Cost of Business for Non-Filers: In order to increase compliance and enhance revenues, the concept of filers and non-filers has been introduced. The cost of business for non-filers has been significantly increased in the recent years.
- Addressing inadmissible input adjustment and illegal refunds in sales tax:
- Taxpayers Facilitation: Introduction of an e-filing process accessible to taxpayers for income tax, sales tax and excise at e-FBR portal has been ensured. Automation of systems has helped in minimizing the contact between taxpayer and tax officers and, as a consequence, the complaints of harassment have been reduced accordingly.
- Strengthening Tax Audit: An audit plan has been reintroduced to accompany the self-assessment scheme and to overcome weak tax compliance. Substantial progress has been made in infrastructure up-gradation and development with the introduction of the integrated tax management system (ITMS), which is available to all the field formations. 8. Customs Modernization and control: Customs modernization reforms are being introduced, aiming at simplifying, standardizing and automating customs clearance procedures supported with strong post-clearance audit controls. Online connectivity of Customs posts has been developed. Risk management principles have been adopted and a Vehicle and Container Tracking System for monitoring transit trade is now in place. The Afghan Pakistan Transit Trade Agreement (APTTA) 2010 has replaced the 1965 agreement, with better controls and enhanced facilitation. An integrated, risk-based automated customs clearance system (WEBOC) has been indigenously developed and launched which minimizes interaction between taxpayers and tax collectors, thereby minimizing malpractices.
- Queue Management System in Refunds: Abusive system of processing and payment of refunds has been improved with the following features:
Firstly, queue management for refund claims (first in first out) both at field formation and FBR headquarters, secondly, transmission of refund cheques into claimant’s bank account.
- Risk Based Registration System.
