ISLAMABAD: The Federal Board of Revenue (FBR) is likely to replace the existing sales tax registration system with a new system, having modern Global Positioning System (GPS) technology, which will help curb refunds fraud through fake registration.
The new system will also help ensure monitoring of business processes and the premises of manufacturing units.
The board is likely to launch the new system prior to the second round of review talks with the IMF scheduled to be held in Dubai from February 1, 2014.
The existing sales tax registration system is lengthy, laborious, discretionary and often prone to corrupt practices. On one hand, the registration application shuffle between the Pakistan Revenue Authority Limited and central and local registration offices and often took months to settle. While on the other, the application suffers from data errors. The FBR chairman took notice of the situation and decided to abandon the faulty system altogether and replace it with an automated one.
The new system, reportedly the first of its kind in the region, will be driven by GPS will also employ the Harmonized System (HS), an internationally standardised system of names and numbers for classifying traded products and commodities. The HS system will also facilitate input tax credit on irrelevant raw material.
However, alternative arrangements have also been made for officials at local tax offices, who will be provided with android-enabled cellphones to visit business premises and transmit images back to FBR’s e-portal. Later, the system will compare location of business premises with the applicant’s address, consumer number and electricity, gas and telephone bills.
The computerised system has been designed in a way that it could issue the registration certificate automatically if everything checks out with no local tax official involved in the process.
