ISLAMABAD: More than 50 percent of the workforce of Inland Revenue Service is not performing its duties reportedly despite double pay package, which may force the Federal Board of Revenue (FBR) to abolish the existing functional-based system and establish 1500-1600 IR Circles across the country to register and ensure compliance by taxpayers.
According to details, writ of the government has totally collapsed due to the functional-based system as taxpayers and non-taxpayers are not ready to respond to notices served by the FBR through its field formations. The Tax-to-GDP ratio is not raising and non-compliance is significant across the country. Less than 50 percent of the existing IR workforce is working effectively and doing their job well to justify the double pay package but the rest of the officers and officials are reportedly not interested in their due job due to loopholes in the functional-based system. The existing system has totally failed to broaden the tax-base and nobody is ready to take responsibility for recovery, revenue collection and documentation of economy.
The double pay packages and special allowance for inefficient workforce is only burden on the national kitty. Resultantly, the writ of the government is no more across the field formations as evident from non-compliance by taxpayers and inefficiency of the tax officers.
The situation was entirely different when ‘Circle-Based System’ was effective and operative across the country. Under the ‘Circle-Based System’, each and every officer was responsible for maintenance of record of assigned taxpayers within his jurisdiction beside enforcement and recovery. Under One-window system, the taxation officer concerned was responsible from issuance of notice to recovery from the taxpayer. The officers knew that it is their responsibility to ensure filing of returns by persons falling under the circle every year. The officers personally go and deliver the notices at the doorsteps due to sense of responsibility and they know that senior officials would call reports from them. Within the area of jurisdiction, taxation officers are fully responsible for their functions and duties.
It is in the interest of the country to restore the ‘Circle-Based System’ at any cost. In India, ‘Circle-Based System’ is effectively working and Tax-to-GDP ratio is also higher than Pakistan.
The restoration of ‘Circle-Based System’ is the only way to broaden the tax-base and documentation of the economy without compromising automation. Earlier, there was no automaton under the old ‘Circle-Based System’. Now, the same system can be restored by strong automation.
The FBR is thinking on the lines of reverting to the circle-based system immediately with smaller territorial circles with BS-17 and BS-18 officers managing those circles. Under the proposed Circle-Based System, each RTO should comprise of four to five Commissionerates depending upon the workload/revenue involved. Each Commissionerate should comprise three to five Ranges headed by an Inspecting Additional Commissioner (BS-19) and each Range should consist of four to five circles headed by Assessing Officer of BS-16-17 & 18.
Under the ‘Circle-Based System’, each circle can closely monitor the performance of all taxpayers falling within the jurisdiction of each circle.
The FBR strongly feels that around 1500 Circles be established across the country at Tehsil level and each Circle can effectively handle 2000-3000 taxpayers which would be a major step towards documentation and BTB.
