ISLAMABAD – Federal Board of Revenue (FBR) Inland Revenue Member Khawar Khurshid Butt, on Friday, said that FBR has proposed new taxation measures to meet the revised revenue collection target of Rs 1630 billion for 2010-2011. Addressing a media briefing at the Large Taxpayer Unit (LTU), FBR IR member expressed dissatisfaction over the existing automation processes, saying that matching of data was not being carried out effectively.
Responding to various queries on revenue collection targets and new taxation measures, FBR Inland Revenue Member Khawar Khurshid Butt told reporters that the Ministry of Finance and FBR are seriously looking at the new revise target of Rs 1,630 billion. However, new measures are mere proposals of FBR and are yet to be finalised. In the prevalent economic crisis in the country, when foreign inflows have dwindled and the IMF tranche is under discussion, increase in revenue collection is an uphill task for tax collectors, Khurshid said.
He added that better monitoring of withholding taxes and quarterly statements would help improve the overall revenue collection. When asked regarding Plan-B of the FBR, Khawar Khurshid Butt said that he was not aware about it. Changes in the tax culture with increase revenue collection through improved automation, reshuffling in field formations and discovering new taxpayers with the help of data warehouse would be among the priorities of FBR.
He boldly admitted that various attempts have been made to broaden the tax-base by using various kinds of computer systems, but none of the systems had proved effective. A team of the FBR is effectively working on the systems to improve existing situation of automation. When asked regarding setting up of the databank, he responded that the FBR is in the process of creating a databank which will hopefully be finalised by September 2011.
FBR Member IR said that issues of the data credibility exist. However, attempts to improve the existing data are being made, but exact percentage of the accuracy of data cannot be worked out. To a question whether NADRA would provide third party information or build an exclusive data warehouse for the FBR, Khawar Khurshid Butt said that meetings are underway to obtain data from the NADRA. However, FBR would not outsource creation of data warehouse to NADRA.
Portraying a realistic picture of the results of reforms, he said infrastructure is in place, but tax officials are not in a position to fully utilise the computerised data of sales tax, income tax and federal excise duty while sitting on computer. Sharing plans on broadening the tax-base, he said that FBR has already appointed a director general for broadening the tax-base.
It is a right step to focused approach towards broadening the tax-base. Initially, the pilot project of the system would be implemented in selected cities and later the system would be replicated in other cities. In this regard, the FBR is also interacting with the Securities and Exchange Commission of Pakistan (SECP) for cleansing the company data maintained by the commission.
When asked why the FBR is unable enforce filing of returns by the NTN holders, FBR Member IR stated that the FBR has issued instructions to the field formations to enforce filing of returns. A gap of over one million persons between the NTN holders and actual filers of tax returns exists. This gap has to be brought down with the help of technology and rights systems in place.
However, he gave full credit to former FBR Chairman Sohail Ahmed for integration of taxes and creation of Inland Revenue Services. It was a big achievement of Sohail Ahmed to merge service groups into a single Inland Revenue Service under reforms.
