Technology cannot be fooled

LAHORE: Our trade bodies have pleaded with the government to withdraw certain policies, as bureaucracy creates hurdles in transparent implementation to exhort illegal gratification. They do not demand elimination of graft.

Most of them oppose electronic surveillance of manufacturing facilities necessary to curb goods going out without payment of sales tax. Yet they complain that the sales tax official unduly harass them, while inspecting their premises.

They claim they do not cheat the state on taxes, but protest vehemently when their accounts are audited. The businesses, if they operate transparently, should fight hard to ensure that corrupt practices of the bureaucracy are exposed.

If they do not hide production and pay actual sales tax, they have nothing to worry. Currently the technology is available that could record their transactions electronically and evaluate the sales tax on production or the income tax on gross revenues.

Retailers are avoiding to install system directly connected with the Federal Board of Revenue (FBR) point of sales because it would reveal their actual gross revenue. Those that do not conceal taxes have no problem with this regime (they though are very few).

As far as the bureaucracy is concerned, it is against their interest to make the system full transparent, as it would deprive them of billions of speeds money, they make every day (over a trillion per year).

The amount of graft is, in fact, higher than the total federal government salaries if other malpractices are taken into account like award of contracts, approval of the work done in peace meal during the contract, grant of special licences and favours.

Any sincere planner would have to take this vested interest of the bureaucracy into account before daring to embark on transparent practices. There would be many hurdles in implementing transparent measures.

The modern technology has improved the efficiencies the world over, but in Pakistan the system moves more slowly when technology without human interference is used. Take the case of refunds to the exporters that the technology ensures within 72 hours after the payment is received by the central bank.

The exporters complain that their refunds are still held for months. What is the hitch? The exporters provide the authorities with documented proof of the sales tax they paid on exported goods to registered sales tax suppliers at the time of shipment.

The system should be such that immediately after the submission of documents the sales tax department should find out electronically whether the supplier has deposited the sales tax or not.

If the sales is not deposited the suppliers should be confronted and should be asked for immediate payment or cancellation of sales tax registration. There should be no leniency on failure to abide by the law.

In the presence of modern technology, the sales tax department of FBR would also know within 48 hours about the genuineness of the invoices submitted by the exporter (the supplier would confirm or deny its invoices).

The exporter could be confronted and the central bank should be requested to withheld only the disputed amount, while releasing the balance refunds. In the meantime, the central bank should immediately release the refund amount claimed by the exporter after receiving the export receipt. The exporter could then be fined heavily for using fake invoice.

All this procedure would have taken months in the past when everything was managed manually, but it is a matter of a few hours or maximum days if the available technology is prudently used. Software can be installed (if not already) to ensure compliance and transparency at all stages.

The exporters should not be penalised by making them wait for months for refunds because of inefficient bureaucracy. We cannot rule out that there are black sheep in trade and industry, as they are in bureaucracy. One can never be sure, which one is honest or crook.

Humans can make errors, but the technology cannot be fooled. Technology ensures that all rules and procedures are followed. The system would not move forward unless the flaw it pointed out is removed.

We have applied this technology successfully in issuance of our Computerised National Identity Cards. Two decades ago, many citizens succeeded in obtaining more than one national identity card even with many different names.

Now it is not possible for any individual to get more than one CNIC. It is because of technology that verifies his / her credentials through biometric and face recognition technology and other data like family tree etcetera.

Transparency through present lot bureaucracy or businessmen would not be possible if most of the affairs of the government are conducted manually.