'Tax IT systems': FBR endorses IBM study

The Federal Board of Revenue has endorsed the study of the IBM team on 'Tax IT Systems and Assessments' with the plea that the tax machinery has failed to carry out the basic function of revenue mobilisation without proper usage of information technology in automation era, despite spending billions of rupees on creating paper-free environment.
Sources told Business Recorder here on Wednesday that the FBR has compiled a report on the findings of the 'IBM-Tax IT Systems Study Assessment and Implementation Roadmap'. According to the FBR's report issued by Shafiq Mohammad Chief Automation FBR and Head of Core Business Domain Team, it is well understood that without proper automation/using the information technology we, in FBR, have failed to discharge our core function of revenue maximisation. The IBM's roadmap provides some plausible solutions in the IT arena and would be of great benefit to FBR. It is high time that the recommendations are put into use in letter and spirit and without any further loss of time.
Shafiq Mohammad has termed the IBM report as a very important document for improving IT systems of the FBR in the light of findings of the IBM report on 'Tax IT Systems and Assessments'. As per report of Chief Automation FBR, the IBM has made a presentation at the insistence of USAID/ Competitive-ness Support Fund (CSF). The IBM team shared the experience of Taiwan, Netherlands, Czech Republic, Malaysia, Trinidad and Tobago, Slovenia, Slovakia, United States and Canada.
The stated objective of the engagement of IBM was to perform assessment of the current Tax IT Systems and related operations (business processes) of FBR against industry leading practice benchmarks and leveraging IBM's industry expertise and to provide recommendations and a high level implementation roadmap that could support FBR in transition from current systems to new/improved systems.
The scope of the engagement included review of existing integrated tax management system (ITMS) and Data Warehouse; review of IT Strategy and how it is aligned with, and supports the overall Business Strategy; review of how IT is supporting the business processes in the purview of overall IT Strategy; organisation and People supporting the business processes and the IT Strategy; IT systems and their functionality available to the Organisation and People to perform processes and Technology Infrastructure that is supporting the systems and their functionality.
Shafiq Mohammad pointed out that the IBM gave the following approach to Modernisation by assuring business/IT alignment in defining requirements based upon modern business process. There is a need to ensure a strong target enterprise architecture; assure strong program management; Use appropriate mix of IBM, partner and custom solutions to meet specific client needs and set release strategy that provides value incrementally throughout the build timeframe.
The IBM team collected information, assessed & analysed the same, documented its findings and gave recommendations. The IBM focused on the said areas in the order of priority in the light of international best practices. The priority areas included strategy, processes, organisation/people, systems/functionality and technology infrastructure.
With regard to the Strategy, the IBM stated that Strategy document that lays the road-map of IT for the organisation is the key. With regard to FBR, the IBM team concluded that a well-defined Modernisation Strategy to tie IT investment to business objectives is not in place and that IT Governance Structure is not defined clearly. It was recommended that FBR must have "Strategy Document" that certain IT/consulting companies prepare professionally. It was because of the lack on strategy that we, at FBR, have not attained the desired automation status, despite spending billions rupees and time that spans over decades, the report of FBR Head of Core Business Domain Team said.
On the issue of Processes, the IBM team highlighted that lack of definitive business process gave rise to multiple stand-alone software applications with no end-to-end integration, lack of standard documentations' and insufficient IT ennoblement of business processes. The Core Business Domain Team (CBDT) has been constituted to fill this gap. Under the existing arrangements the members of CBDT have additional assignments with no incentives to do the extra job of automation, Shafiq Muhammad said.
In the area of Organisation and People, IBM have concluded that Program and project governance is not adequate due to lack of project management office (PMO) to establish processes and enabling tools, manager and manage service/objectives delivery, strategies, change management, knowledge transfer and training etc, leads to huge expenditure but with minimum desired results. The IBM team has strongly recommended establishing the PMO, the report said.
FBR Chief Automation said that on the issue of system and functionality, the IBM found that not only integration among key applications to enable end-to-end business processes is inefficient but also key components of Core tax processing component (Accounting), Data Warehouse and Case Management are missing. The IBM team strongly recommended for designing and building data model/data warehouse, maintenance of master data by multiple user groups, legacy master data and multiple databases increases risk in terms of data quality, integrity and security.
The IBM team found out that Technology Infrastructure is sufficient but crucial factors of scalability, security and availability of databases is not in accordance with international best practices. Due to usage of different versions of databases, technical integration between distributed applications is inefficient, Shafiq Muhammad added.
The IBM report on FBR's IT systems said that a well-defined modernisation strategy to tie IT investment to business objectives is not in place. Moreover, IT Governance Structure is not defined clearly. Within the FBR, the software development methodology is deficient in certain components and some underlying processes are not in place. The IBM report acknowledged that the applications such as E-FBR Portal, Payment System and E-Registration System have played a pivotal role in automating processes of filing, Payment and registration.
The IBM has found that the key components of ITMS are missing ie core tax processing component-accounting; Data Warehouse and Case Management. The maintenance of master data by multiple user groups, legacy master data and multiple databases increases data quality risks, integrity and security.
It added that the technology infrastructure capacity of the FBR is sufficient to cater for the current number of internal and external users. The scalability, security and availability of databases is not in accordance with best practices as different versions of databases are being used by the FBR, the IBM report added.