The Federal Board of Revenue (FBR) has taken a right step in the right direction when it decides to devise a foolproof mechanism to streamline the tax collection system.
The board is developing an electronic scrutiny system (e-scrutiny system) to investigate and resolve tax evasion cases and the federal government has given a legal cover to the FBR’s move through Finance Bill 2014. The e-scrutiny system will also help analyze the available data and will cross match the income tax returns as well as will minimise the physical interaction between the FBR officials and the taxpayers. The system will automatically send intimations to the registered taxpayers about any issue in the tax returns. Besides, the FBR will also be able to use the system as an instrument to laydown procedures and specifications for the improvement of the tax collection exercise.
The major advantage of the computerised system will be to detect alleged corruption in the tax machinery and provide an opportunity to the business community to rectify their mistakes in their tax returns before any legal action is initiated against them by the tax department. The computerised system will also scrutinise the sales tax returns filed by the registered taxpayers and will keep the board updated about the record of tax issues. The system will help send intimations and will receive responses from the taxpayers for the information of the revenue officers.
It is hoped that the computerised system will help alleviate the fears and problems of those taxpayers who are willing to pay taxes, but are unable to do so because of alleged blackmailing by corrupt elements in the tax machinery. Though tax evasion prevails even in the developed economies, unfair treatment and persecution is not so common there. It is necessary to protect the rights of small and medium level businessmen as a sense of vulnerability prevails among them. They want to run their businesses instead of indulging themselves in costly litigation.
