FBR to review tax system

[Lahore_Real_Estate]

LAHORE - The Federal Board of Revenue (FBR) has constituted five working groups under the Finance Minister’s Tax Reforms Coordination Group to conduct a comprehensive review of the tax system. Documents made available to Profit indicate that FBR has set up Revenue Performance Group, which will develop and refine the tax revenue estimates for financial year 2011-12, while a separate working group – Special Initiative Group – has been formed for broadening the tax base in the country. This group will be responsible to evaluate, implement and incentivise new initiatives, such as Sales Tax Incentive Schemes, Afghanistan Pakistan Transit Trade Agreement, etc. Addressing the transparency and human capital related issues, another working group – Institutional Improvements Group – has been set up. This group has been assigned to improve transparency in the tax machinery working by resolving technology and human resource related issues. In addition, this group will closely monitor Sales Tax refunds to avoid fake refunds that have already caused huge losses to the national exchequer, official document reveals.
The FBR has also constituted a Tax Policy Group that will develop new policies and help in maintaining consistency in longer-term, while Outreach Group has been assigned to improve the communication with external stakeholders. This group will interact with the taxpayers, media, national and provincial assemblies and government to disemminate controlled and effective information.
However, the FBR did not set any target or timeframe for these newly setup working groups. It has been pointed out that to strengthen the efficiency and effectiveness of the tax machinery the board is continuously improving technology. In the official documents, it has been pointed out that development of electronic payment processing system is underway, which will is likely to be completed by the end of this year.
The board has indicated that through consistent efforts pending Sales Tax Refunds have been shrunk by 38 per cent, while some 54,434 cheques worth over Rs52 billion were issued during fiscal year 2010-11 compared to 20,453 cheques worth Rs27.2 billion in the previous year. The FBR has set up fully automated Sales Tax refund processing system, which is available to manufacturer or exporters and capable of processing Sales Tax refund claims in 48 hours.
Highlighting it performance, the FBR has indicated that to ensure better coordination among the board, the number of members have been reduced from 12 to eight. In addition, five new regional tax offices have been established in Karachi (2), Lahore, Sargodha and Bahawalpur, while around 80 divisions of commissioners have been restructured to deliver on audit, enforcement and legal functions.