Daily Times

Chairman Federal Board of Revenue (FBR) Muhammad Jehanzaib Khan has apprised about a huge reforms agenda been finalised for FBR in which massive investment will be made with major thrust on the Information & Communication Technology (ICT) creating an interface between taxpayers and tax collector and minimising human contact.

“Work is also underway on simplification of tax laws and tax policy and we are also in the process of delineating the tax roadmap which would define taxation principles for the next 10 years to be followed for the imposition of taxes, besides devising a roadmap for creating balance between direct and indirect taxes”, he added while exchanging views at a meeting during his visit to the Karachi Chamber of Commerce & Industry.

Chairman Businessmen Group & Former President KCCI Siraj Kassam Teli, Vice Chairmen BMG Tahir Khaliq and Zubair Motiwala, President KCCI Junaid Esmail Makda, Senior Vice President Khurram Shahzad, Vice President Asif Sheikh Javaid, Former Presidents AQ Khalil, Haroon Agar & Shamim Ahmed Firpo along with Managing Committee Members and others were also present at the meeting.

Referring to concerns expressed by Chairman BMG Siraj Teli over poor attitude and culture at FBR along with trust deficit between tax-collectors and taxpayers, he said that organisational change and change in attitude was an uphill task not just at the FBR but in any organisation.

“However, FBR is ready for the change in its attitude and culture. I absolutely have no doubt that vast majority at the FBR is willing to change in order to come up to the expectations and jointly move forward”, he added.

Jehanzaib Khan admitted that FBR has remained largely focused on the existing taxpayers who are already in the tax net while tax broadening has not taken place.

It is also a fact that FBR possesses detailed information about every tax payer and evader due to massive digitalisation but they don’t have the capacity to handle and interpret this huge data.

“We are trying to build capacity to scrutinise such an enormous data carrying details about the lifestyle of individuals within and outside the tax net”, he assured.

FBR is ready for the change in its attitude and culture, devising a roadmap for creating balance between direct and indirect taxes

Chairman FBR further informed that as a test case, FBR recently issued notices to 6,500 individuals outside the tax net with numerous pre-defined parameters including purchase of property worth more than Rs30 million or car purchased by such individuals. FBR assessed a recovery of Rs3 billion from these individuals, of which Rs1.75 billion have been recovered so far. He further stated that FBR has been facing a lot of crises mainly due to evasions in Sales Tax because of FBR’s own weaknesses.

The Sales Tax has to be administered well by reviewing numerous exemption regimes that have distorted the entire taxation system, he opined, adding that the rate of Sales Tax can be reduced in due course if its application becomes uniform and all the distortions along with various concessions were removed.

Referring to KCCI’s suggestions about Asset Declaration Scheme, Chairman FBR assured that KCCI’s suggestions for the next Asset Declaration Scheme will be seriously reviewed and taken into consideration.

“We are the custodians of your data and it is our responsibility to keep your data confidential and fulfill the promises”, he assured. He also agreed that constitutional guarantee and judicial protection must also be part of the Asset Declaration Scheme.

“Whatever is possible will be given in the Asset Declaration Scheme and your recommendations in this regard will certainly be reviewed and considered”, he added.

Referring to KCCI’s concerns over FBR’s discretionary powers, he said that judicious exercise of these powers was the responsibility of FBR officials. “Having power to search or arrest does not mean that we start searching and arresting everyone.

If taxpayers and tax collector improve their communications by promptly replying to notices and openly sharing their miseries, there will absolutely be no need to exercise these powers”, he added.

Published in Daily Times, March 19^th 2019.