Daily Times

Ensuring ease of doing business through taxpayers’ facilitation, simplification of laws/rules, automation of processes, digitization of economic transactions, minimization of direct contact with taxpayers and maximization of outreach and awareness remains at the heart of FBR’s larger vision. A wide array of innovative interventions has been made both at policy and operational level in order to promote a culture of tax compliance by building bridges between FBR and its key stakeholders. Building further on this in a watershed development, Mr. Shaukat Tarin, Advisor to PM on Finance & Revenue, has launched the formulation of Inland Revenue Code in a bid to harmonize all inland taxation laws and maximize facilitation of taxpayers. This unique policy intervention promises to ensure ease of doing business by removing multiplicity of taxing statutes and a plethora of rules & regulations devised to operationalize them. It is pertinent to mention that FBR, on domestic side, implements and enforces four major tax laws i.e. the Income Tax Ordinance, 2001, the Sales Tax Act, 1990, the Federal Excise, 2005, & the Islamabad Capital Territory (Sales Tax on Services) Ordinance, 2001. These four tax statutes are then supported by equal number of rules compiled in voluminous books comprising the Income Tax Rules, 2002, the Sales Tax Rules, 2006, the Federal Excise Rules, 2005 and the Islamabad Capital Territory (Sales Tax on Services) Rules, 2001. Resultantly, a taxpayer has to consult practically eight law books in order to engage with the tax system and pay off his/her tax liability. It goes beyond saying that the tax laws needed harmonization and simplification. This has long been demanded by World Bank, IMF, ADB and other bilateral and multilateral donors. Similarly, there have been pressing demands by the civil society, lawyers’ community and also superior courts who have found the above laws to be very complexed and even un-implementable.

Keeping this in view, FBR has decided to harmonize all these four tax laws by merging them into one law book supplemented by single rules book. It is in this context that in collaboration with Asian Development Bank, a high level committee has been constituted by FBR consisting of eminent tax professionals from public sector and legal experts from ICAP to continuously oversee and review the draft legislation to ensure quality and correctness. The said committee would monitor the drafting of harmonized Inland Revenue Code, covering all tax laws by the end of March, 2022. After consultation with all key stakeholders including chambers of commerce, trade bodies, tax practitioners and field formations over April & May, 2022, it will be available for presentation before the Parliament in the Budget Session, 2022 for promulgation. It is positively hoped that the new Inland Revenue Code will be enforced with effect from July 1, 2022. This high value policy intervention is organically embedded in the larger vision of FBR to promote a culture of automation and digitization to maximize taxpayers’ facilitation. Furthermore, in order to ensure that the Inland Revenue Code is thoroughly discussed with all major stakeholders and finally developed within the given timelines, Advisor to PM on Finance & Revenue has directed Chairman FBR to personally review the progress of this immensely important draft law and update him on regular basis. Inland Revenue Code, once implemented, will certainly usher in a new era.

A wide array of innovative interventions has been made both at policy and operational level in order to promote a culture of tax compliance by building bridges between FBR and its key stakeholders.

Similarly, FBR is vigorously introducing automation and digitization not only to maximize the much-needed revenue but also to ensure transparency, efficiency and facilitation in the tax system. Country’s premier revenue organization is all set to digitize and automate the processes involved in tax collection in order to minimize human interaction with taxpayers and thereby ensuring transparency in the system. The recent launch of Track and Trace System to digitally monitor important sectors like Tobacco, Fertilizers, Sugar, Beverages, and Cement from manufacturers to the end users, is yet another milestone achieved by FBR. Furthermore, Point of Sales System (POS) introduced by FBR is aimed at ensuring real time monitoring of actual sales of Tier-one retailers to plug revenue leakages and thus increase the revenue collection, significantly. Over 14,600 point-of-sale terminals have already been integrated with real time reporting system of FBR. In collaboration with NADRA, plans are also afoot to use Artificial Intelligence (AI) and Mathematical Modelling (MM) in order to ascertain real income and thus determine actual tax liability. Likewise, FBR is all set to launch Single Sales Tax Portal by the end of November, 2021. The proposed Portal would not only be beneficial for the taxpayers in filing their single monthly Sales Tax Returns but would also be helpful for tax collectors in having a 360-degrees view of taxpayers’ business activities across the country in order to maximize revenue potential and tax compliance. By all standards, this is a giant leap forward in taxpayers’ facilitation and at the same time, a significant step in harmonization of taxes between federal and provincial governments. These are some of the key initiatives which would broaden the tax base, ensure transparency, and promote accountability within FBR.

Likewise, promoting FBR’s vision, there are a number of out-of-box solutions being designed and executed by Pakistan Customs to ensure transparency, automation of processes and maximize ease of doing business. Recent formal launch of Pakistan Single Window (PSW) by FBR is being termed as game changer for promotion of international trade with Pakistan, thus having a massive potential to increase revenue for the country. Authorized Economic Operator Program (AEO) has been introduced to facilitate the processing of import and export consignment of AEO companies on priority through We-BOC system. Similarly, Clearance in the sky has been introduced for the seamless processing/clearance of goods declarations of air cargo before the landing of air craft in Pakistan. There are quite a few other initiatives being taken by FBR to reform and restructure its tax system which cannot be described in detail due to limited space.

Furthermore, to ensure facilitation of taxpayers and maximize ease of doing business, a centralized automated refund system has been introduced with no requirement for manual application and verification. The system-based verification system issues refund directly into the bank accounts of taxpayers without any requirement of face-to-face interactions with tax authorities. An enabling legal framework has also been provided through insertion of relevant provisions in tax law. In order to provide faceless tax administration, reducing compliance cost and saving precious time of the taxpayers, the mechanism of e-hearing has also been devised. Enabling legal provisions for admissibility of evidence collected during e-hearing have been introduced through 227-E of the Income Tax Ordinance, 2001. The mechanism of online filing of appeals has been made available to taxpayers. The requisite enabling legal provisions have been introduced through section 127 of the Income Tax Ordinance,2001. These innovative and out of the box measures taken by FBR have contributed to a significant increase in revenue collection. The Revenue Target for F.Y 2020-21 has not only been achieved but also surpassed by Rs.54 billion by collecting Rs. 4,745 billion against assigned target of Rs. 4,691 billion. Similarly, maintaining the growth momentum, the revenue targets for the first four month of current financial year have been surpassed by Rs.233 billion with year to year growth of 37% by collecting Rs. 1,840 billion against assigned target of Rs. 1,607 billion. Income Tax Returns for tax year 2021 have crossed 2.8 million as on 1st November, 2021 whereas tax paid with returns stood at Rs.52 billion as against 1.8 Million returns and 29.6 Billion tax paid with returns on 8th December, 2020, the closing date, last year.

As a matter of fact, the commendable performance of FBR in the previous Financial Year 2020-21 and first four months of current Financial Year 2021-22 has generously been appreciated at all levels and also by the Prime Minister himself, on more occasions than one. This well-deserved acknowledgment and hard-earned recognition has infused renewed spirit in the rank and file of FBR. They are fully determined to not only achieve the maximum revenue during the second quarter but is also geared to exceed the staggering target of Rs. 5,829 Billion, set for the current FY 2021-22. With every passing day, FBR is covering more miles on the road to glory. This is only the beginning while the last & the best is yet to be. Team FBR is all set to create history and surprise many around including those who spare no opportunity to malign it, willfully or otherwise.

Civil Servant/Success Coach/Motivational Speaker