TRC wants road map for implementation on its recommendations

The Tax Reforms Commission (TRC) has asked the government to give a final road map for implementing its tangible tax recommendations as otherwise the commission may cease its work after finalising its report in next few days.

An official source said the government had given assurances to the TRC that its recommendations would be implemented in the budget of financial year 2015-16. However, the budget recommendations for the next financial year have ignored many of its tangible recommendations which has annoyed the commission.

The finance ministry was assuring the commission that it recommendations would be implemented in a phased manner. However, the TRC members are not satisfied with the assurance as they want implementation of reforms simultaneously and across the board, which they were assured at the beginning.

The government is of the point of view that it will introduce reforms gradually as implementation of all the recommendations in one go was not wise. The TRC is of the opinion that the tax reforms will only pass through if the restructuring of tax collection department, Federal Board of Revenue, was done in the manner recommended in the report.

The restructuring of the FBR was agreed by the government, the source said, adding there were many political issues attached to the said reforms which the government wanted to avoid and currently it was interested in only those recommendations which help in increasing tax revenue in the short-term.

This official attitude has annoyed the TRC which want complete implementation on recommendations. The government claims that it has introduced the benami transactions bill and it will take time for passage and implementation and similarly other tangible recommendations will be taken up.

However, the TRC is not satisfied with this approach and wants the government to give a final road map on implementation of recommendations. Various meetings have been held during the last two weeks between the government and the TRC, and so far no decision has been reached, the source said, adding that the TRC has conveyed that they will wait till the completion of their final report.

The TRC will make public its final report and if the matters are not settled with the government by that time the commission members will resign and the TRC will cease to exist, the source said.

It is important to mention that the TRC was set up last year in September by the government and it was mandated to give recommendations to reform the tax system and its recommendations were to be implemented from the financial year 2015-16. However, Finance Minister Ishaq Dar in his budget speech ignored tangible recommendations of the TRC and only incorporated those which helped in generating more tax revenue.