FBR’s inaction decelerates tax base widening drive

ISLAMABAD: Federal Board of Revenue’s (FBR) failure to integrate information with National Database & Registration Authority (NADRA) and apprehend potential tax dodgers, despite having the powers to do so, is impeding its tax base broadening drive, The News learnt on Wednesday.

“We are still in the process of finalising protocols to integrate data between NADRA and FBR for the purpose of identifying non-filers and under filers. It requires spadework to convert data into taxability” said Dr Mohammad Ashfaq, Chairman FBR, talking to reporters after launching Inland Revenue Strategic Reform Plan for 2021-2025.

During his press briefing, the chairman conceded that the newly inducted provision for arresting potential tax dodgers with the approval of finance minister and chairman FBR could not be implemented so far.

According to an official statement, FBR has launched Inland Revenue Strategic Reform Plan (2021-25) with an aim to transform the tax apparatus into a world-class, technologically-savvy, and taxpayer-centric service.

“The plan encapsulated FBR's vision for the future… as it aspires to become a stronger and more modern institution, driven by the principles of integrity, efficiency and effective service delivery,” said Dr Ashfaq addressing the ceremony.

The event was attended by key officials of international donors including World Bank, FCDO, IMF, Asian Development Bank, and senior leadership of FBR. Dr Ashfaq registered his gratitude to all the development partners for their much- needed support in developing this valued document and assured them of his fullest cooperation in implementing the same.

It is pertinent to mention that the new plan clearly sets the reform agenda for the four-year period from 2021-22 through to 2024-25.

The plan provides reform actions to improve tax administration in the 4 strategic reform areas which include improving tax compliance, strengthening tax administration, building institutional capacity, and reinforcing legislative framework.

Furthermore, according to the official statement, the Inland Revenue plans to address the challenge of low tax compliance through implementing a compliance risk management capability, improving registration, filing, payment, and reporting compliance, reducing the cost of compliance, strengthening the audit capability, streamlining processes, and procedures.

“Needless to add that greater use of automation for better service delivery and data-centric approach is a key reform area. Leveraging existing data holdings and developing further data sources will allow the FBR to better identify compliance risks and allow the FBR to direct our resources to areas of highest risk,” the statement said.

Inland Revenue also endeavours to improve the skill set of its work force and simplify and standardise the IR procedures by providing a common tax code, the statement says adding, the plan will be reviewed on an annual basis to ensure the programme is still a sustainable and viable reforms strategy.

“The envisaged reforms have the potential to structurally improve the performance of the tax system and make significant contributions to revenue mobilisation,” as per the official FBR statement.