FM Akhtar Briefed on FBR’s Reform Plan, Improved Economic Documentation
Pakistan wants to add to the tax raisers’ list in the world. Even the International Monetary Fund (IMF) also asserted the directions to the Federal Tax Collection department to raise more taxes. So, to comply with the directives of the IMF, the FBR has initiated some new measure to collect taxes. In this regard, FM Akhtar briefed on FBR’s Reform Plan, and Improved Documentation. The Federal Board of Revenue (FBR) has also shared a comprehensive strategy to combat the non-filers to enhance economic documentation. The firm will take measure to leverage third-party data, including provincial databases.
How FBR Will Raise the Tax Collection Mechanism
The FBR, in collaboration with the National Database and Registration Authority (Nadra), tries to expand its cooperation and data of the filer. The data exchange has started with accurately assessment of the income of existing taxpayers. Likewise, the system will enable the filers to register as new ones, also to finalize tax profiles for non-filers. The FBR and Nadra have started a consultative process to broaden the tax base. The subject matter aims to utilize diverse data sources and reinforce efforts to register the non-filers.
What FM Akhtar Says
The FBR has communicated to the caretaker Finance Minister about the inception of the restructuring of Pakistan Revenue Automation Limited (PRAL). During discussions, the caretaker Finance Minister inquired about the performance of PRAL. He also suggested ways to enhance its effectiveness. In line with this, sub-groups comprising FBR officers will be formed to propose restructuring and revitalization plans for PRAL.
Non-filer and Defaulters in Trap
Emphasizing the need for technology in economic documentation and tax base expansion, the caretaker Finance Minister urged the adoption of automated solutions. The FBR has established the position of Member (Digital Initiatives) to oversee digital systems such as track and trace. The data will also be Synchronized Withholding Agents, point-of-sale (POS), and digital invoicing.
Directorate General’s Stance
The Directorate-General for Digital Invoicing and Analysis and Synchronized Withholding Agents System will integrate sales tax supply chain data and withholding agent information, respectively. This integration will make sure that sales data from manufacturers, dealers, distributors, wholesalers, and retailers is linked to the FBR’s system. Monthly sales tax information, including payments, will be readily available to prevent the evasion of sales tax.
Final Words
Under the new system, the FBR’s system will automatically generate monthly sales tax returns for various supply chain categories, integrating with the Directorate-General for Digital Invoicing and Analysis. The point-of-sale system will fall under the jurisdiction of the Member for Digital Invoicing and Analysis, eliminating the need for monthly sales tax returns or audits as taxpayer data is regularly updated online.