Taxpayer ledger system partially implemented

SOHAIL SARFRAZ

ISLAMABAD: The Federal Board of Revenue has partially implemented taxpayer ledger system as all the tax-related transactions other than tax returns and tax payments are currently not being captured through the ledger system.

Sources told Business Recorder here on Tuesday that the taxpayer ledger system is an IT-based system of the FBR which has to capture all tax related transactions of a single registered person. The taxpayer ledger system is a kind of bank account statement to capture of all kinds of transactions of the registered person. It could be termed as a system which will document all financial transactions of the registered persons. Under the taxpayer ledger system, all tax liabilities, payable taxes and paid amounts would be made part of the system. Once the tax demands/arrears/penalties, etc, are added to the system it would complete the taxpayer ledger system.

Sources said that so far the taxpayer ledger system has not fully been implemented in the field formations. The taxpayer ledger system is the most important component of the reform initiative of the FBR. Under the concept, there is need to have a general ledger for each taxpayer. This ledger would encompass data on taxpayer, tax type, tax period and would enter every financial transaction associated with the taxpayer, tax type and period for which it is levied.

The FBR has to establish a protocol to convert existing paper ledgers to the new taxpayer ledger. The tax department has to proceed to populate the ledger with current payments/charges as they occur. The FBR has to charge the Core Business Domain Team and Enforcement staff to develop the arrears for the recovery officers’ application.

The FBR was of the view that the automated collection program (EPARS) has been developed, tested and deployed as per requirements. However, operation in real term needs the approval of Ministry of Finance which is under process. Taxpayers’ ledger based on transactional data collected through various applications is already in place.

The debit/credit entries are being posted from available databases and entries related to transactions not being done through an automated system can be posted using journal voucher option.

The ledger is currently posting Sales Tax and Customs related transactions. However, to get a complete picture of ledger one needs to focus on following: Firstly, Arrear Register-RTOs would have to provide opening balance; secondly current demand/refund - Enter Debt/Credit entry as journal voucher where transaction processing system is not generating DB. Thirdly, there is a need to get withholding statement with proper identification. The implementation of the EPARS and Taxpayers’ ledger relates to the Operational Wings of the FBR.