ISLAMABAD: The Federal Board of Revenue (FBR) has proposed establishment of Pakistan Revenue Authority (PRA) at national level by merging of existing FBR and all provincial revenue bodies that would require constitutional amendment.
It might be a long wish-list on which the government would have to evolve consensus among the Centre and provinces. For undertaking constitutional amendments, the government would have to take mainstream political parties within the Parliament into confidence for moving ahead towards desired objectives.
In response to reform plan presented by Dr Ishrat Hussain-led institutional reform body, the FBR prepared alternate plan that is combination of both Dr Ishrat Hussain proposals and some new proposals drafted by the FBR high-ups after holding in-house consultations with all relevant stakeholders.
“With proposed plan, the FBR can fetch additional Rs750 billion after implementing our proposed reforms on per annum basis,” a top FBR official claimed in a background discussions held with this correspondent here at the FBR’s headquarters on Thursday.
The FBR also proposed recording room in to jurisdiction of FBR’s headquarters where all VIPs including parliamentarians should interact with FBR high-ups where all conversation could be recorded. Such facility is aimed at reducing political interference into affairs of the FBR, said the official.
The FBR has agreed to the proposal given by Dr Ishrat Hussain-led body on institutional reforms to reduce number of FBR’s members from 13 to eight while the proposal of appointing deputy chairman from Inland Revenue Service and Customs Groups have been rejected. The FBR has proposed taxation officers at district levels because billions of rupees transactions were occurring on daily basis but the district levels were not on radar screen of the tax collection agency.
The proposed reform plan has been finalised by the FBR’s top guns and could be presented before Prime Minister Imran Khan anytime keeping in view his convenience. The FBR official said the tax machinery agreed to slash down number of members from 13 to eight as slots of different members would be merged and some positions at members level would be abolished.
The post of FBR’s member facilitation and taxpayers education (FATE) would be abolished. While position of one member FBR would be created as member international taxes. Now there would be eight members including member IRS operation, member IRS policy, member international taxes, member customs operation, member customs policy, member HRM/admin, member strategic planning/legal and member audit/accounting. On the establishment of PRA, the FBR has proposed that ideally there should be one umbrella tax collection agency at national level. In the aftermath of 18th Constitutional Amendment, if PRA at national level was not possible then data integration among the FBR and provincial PRAs must be ensured as early as possible.
On organisational structure levels, the FBR proposed that regional taxpayer offices (RTOs) should be converted into tax facilitation and broadening of tax base related offices.
The quantum of tax related matters must be transferred into large taxpayer units (LTUs). The operational business must be handed over to LTUs where all operational fields such as enforcement, audit and all other functions should be distributed among the officers. After generation of tax demands the case must be transferred to Corporate Tax Office or LTUs for collection of due taxes.
The FBR has assessed that there were over 6,000 employees working in grade 1 to 16 so there was thinking to lay them off by offering VSS. After relieving existing unskilled staff, the FBR plans to hire professionals having basic knowledge about technology, economics, maths, accounting and IT skills instead of doing masters in history or political science.
The FBR reforms will be implemented in different phases. The FBR will remain into public sector but it will be granted financial and administrative autonomy on pattern of State Bank of Pakistan (SBP).
The official said that the FBR also agreed with the proposal given by Dr Ishrat Hussain that out of collected taxes 1 percent administrative cost would be allowed to FBR.
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