PRMC yet to recommend significant changes for revenue apparatus

ISLAMABAD: The Reforms and Resource Mobilization Commission (PRMC) has yet to produce any significant recommendations in order to fulfill its mandate to modernise revenue machinery and prepare budgetary proposals.

Despite constituting eight sub-committees, the PRMC has failed to produce any substantial recommendations to overhaul the taxation system. The committee's interim report was presented to the Minister for Finance by Commission Chairman Ashfaque Tola last week, but the recommendations were kept confidential, leaving the public discourse in the dark.

The PRMC was initially composed of eleven members, but the number has since risen to around three dozen. While some members may benefit from being part of the high-powered commission, the lack of progress is concerning.

The commission has formed eight sub-groups to tackle various issues, including simplification of legislation on income tax, sales tax, and customs duty, as well as strategies for upgrading the IT system in the FBR, broadening the tax base, and harmonizing federal and provincial taxes.

However, as of now, the commission has failed to produce a report despite being initially assigned to do so by mid-April 2023. The first sub-group was constituted on the topic of Simplification of Legislation on Income Tax with the inclusion of Munir Hussain, Abid Shahban, Abdul Qadir Memon, Asif Haroon, Dr. Iqbal while co-opted members included Irfan Chawala, Rizwan Bashir, Mohammad Aftab Alam, Mazhar Saleem Shah, Zeshan Merchant, Saadia Nazeer and Amayed Ashfaque.

The second sub-group of Commission was constituted on Simplification of Legislation on Sales Tax and Federal Excise Duty and it included Abdul Hameed Memon, Haider Ali Patel, Abid Shaban and Dr Iqbal while co-opted members included Atif Aboobukar, Rafaqat Hussain, Muhammad Rafi, Abdul Razaaq, Shameer Haroon, Zahid Ateeq, and Muhammad Furqan.

The third sub-group has been constituted on Simplification of Legislation on Customs Duty included Nisar Mohammad, Abdul Hameed Memon, Zahid Bashir while co-opted members included Areeba Rahil, Asad Feroze, Imran Tariq, Ghulam Mustafa Qazi, Zakaria Usman, and Ibrahim Kusumbi.

The fourth sub-group on Strategy for Up-Gradation of IT System in the FBR with inclusion of eight members and co-opted members. The fifth sub group was constituted on financial inclusion and curbing of parallel economy with inclusion of eight members and co-opted members. The sixth group was constituted on FBR’s autonomy with inclusion of ten members and co-opted members in its fold.

The seven sub group was constituted on harmonization of federal and provincial taxes with inclusion of ten members and co-opted members. The eighth sub group was constituted on broadening of tax base with inclusion of ten members and co-opted members.

Some of the report's contents have leaked to the public, indicating that the commission has not made any substantial recommendations so far. This is reminiscent of previous reports that were ignored by the FBR, such as the Tax Reform Commission led by Massod Naqvi during the previous PML (N) government.

If the PRMC report remains confidential, it is likely to suffer the same fate as these previous reports. As such, it is essential that the commission's findings are made public to encourage public discourse and ensure that the recommendations are implemented.