The Federal Board of Revenue (FBR) of Pakistan is a government-affiliated institution that is responsible for administering taxes and assignments related to customs. The chairman of FBR (Mr. Malik Amjed Zubair Tiwana) connects with all the ministries and departments of finance before reporting to the Prime Minister (Mr. Anwaar-ul-Haq Kakar) and the president (Dr. Arif Alvi). The chairman’s duties include the formulation and administration of fiscal policies and the imposition and collection of federal taxes. All in all, the institution is responsible for imposing and collecting taxes and generating revenue to improve the economic health of the country. Since its foundation, it followed the British Raj structure till the 1960s. In July 2007, the FBR Act was passed, and the Central Board of Revenue was named the Federal Board of Revenue.
To stay on the right path to success and alleviate the economic crisis, it is mandatory for Pakistan to follow the right strategies, and it is the duty of institutions like FBR to make such policies. In this regard, the caretaker Prime Minister has attended a meeting recently in which he directed the concerned authorities to formulate a comprehensive strategy, in consultation with all stakeholders, to improve the performance of the FBR. He presided over a meeting to mull over the measures for improving the performance of the tax authority. Moreover, he insisted that the utilization of modern technology was inevitable to improve the taxation system. The participants also deliberated upon different proposals aimed at restructuring the FBR.
There is no doubt in the fact that revenue collection is the backbone ofthe national economy. The Federal Board of Revenue (FBR) in Pakistan plays a crucial role in the country’s economic landscape. Its policies and practices directly impact businesses, individuals, and the overall financial health of the nation. And as Pakistan is going through very hard times, it is immensely important for each and every one of us to stay committed and patriotic to put the country on the path to success. So, the necessity of favorable policies from the FBR cannot be overstated, as these are vital for a healthy economy, contributingsignificantly to sustainable development.
The revenue collected by the FBR is essential for the government to fund public services, infrastructure development, healthcare, education, and various other sectors vital for the country’s progress. These procedures can include simplifying tax procedures that can lead to increased revenue collection without burdening taxpayers excessively.When businesses feel confident in the tax system’s fairness and transparency, they are more likely to invest, expand operations, and create job opportunities. This, in turn, contributes to economic growth and stability. Additionally, FBR should focus on designing favorable tax classes to have a direct impact on the livelihoods of ordinary citizens. This way, there will be a lesser burden on low-income individuals, such as the salaried class and small businessmen, ensuring that they are not affected. Similarly, the institution should offer financial assistance to those residing in countries such as the US, UK, Germany, UAE, KSA, Kuwait, and other parts of the world and send remittances to their friends and family members here in Pakistan. Also, it’s a necessity for FBR to include every possible citizen in the tax net to collect as much revenue as possible. However, till yet, there has been no progress made so far.
One of the major issues in our country’s tax collection system is the uneven distribution of tax classes. For instance, there is no tax on a person earning 600,000 per annum, while the moment someone exceeds this limit, there is 12.5% of the amount. In addition, there are huge sales taxes on businesses, affecting their income and growth. This is one of the major reasons why more than 50% of Pakistanis don’t want to file their taxes and deal only in cash. This is not it. Recently, the LHC has issued notice to the FBR and the concerned tax officials of Inland Revenue to submit their response in the writ petition (71690 of 2023).The banks have released the disputed tax amount of the company from the personal bank accounts of the director of the company. According to the high court, the petitioner taxpayer is angry about an action under section 140 of the Income Tax Ordinance 2001. An amount has been withdrawn from the personal bank account of the petitioner, no notice or assessment order has been served against the petitioner, and the disputed notice is without any details of the outstanding amount against the petitioner. However, his company was shut down three years ago, with a heavy loss, due to the Covid-19 crisis. The Inland Revenue officer, who has issued an impugned notice, shall appear in person before the court on the next date of hearing, the LHC’s order added. The petitioner has informed the LHC that the deputy commissioner of Inland Revenue has issued recovery notices to the banks and withdrawn the amount from the personal bank account of the taxpayer, being director of Modern Building Maintenance (Pvt) Limited, which is illegal and unlawful.
In my opinion, the institution’s reputation plays a major role in drawing investors’ attention to start new projects. So, FBR should reshape its policies in favor of the Pakistani business community. Also, if anyone is found guilty of any corruption charge, he must be immediately fired. One can take an example from the Police department where the Inspector General of Punjab Police (Dr. Usman Anwar) is doing an outstanding job in controlling the crime and giving awareness to the residents. Hopefully, soon, our country will see growth in its economy again and become the most successful state in South Asia.
The Writer is a Senior Social & Economic Analyst
Can be found at [email protected]