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ISLAMABAD: A meeting of the Economic Coordination Committee (ECC) of the Cabinet has approved Rs4 billion for the Federal Board of Revenue (FBR) enabling it to upgrade its existing infrastructure and logistics support to achieve revenue targets.

The FBR in a summary moved to the ECC pointed out that in the fiscal year 2021-22, 15 new offices have been created but no additional allocation of funds has been made by the Finance Division.

There is an immediate need for office space, infrastructure and logistics for its existing establishments as well as newly-created offices, the meeting was further requested.

The meeting was informed that Pakistan Raises Revenue (PRRP) Program was signed between the government and the International Development Association, the World Bank with the FBR as an implementing agency. As per the financing agreement an amount of US$ 400 million is to be awarded as loan over a period of five years.

Component-I of the Program of US$ 320 million would be provided to the FBR as budgetary grant through the Ministry of Finance, and component-II, amounting to US$ 80 million, would be provided as traditional Investment Project Financing (IPF). The meeting was further stated that component-I is based on Disbursement Linked Indicators (DLI) whereby, pre-agreed amounts would be allocated annually subject to achievement of DLR for financing expenditures.

One of the major objectives of these initiatives is to increase effective compliance controls and enforcement of taxpayer obligations by extending its outreach and strengthening its enforcement drive through various enforcement initiatives such as establishing Inland Revenue enforcement network (IREN), points of sale monitoring (POS), track and trace system (TTS) and border management initiatives (BMI) for curtailing the increase of smuggling.

Under the PRRP as well as the indigenous reform agenda, the FBR has undertaken a number of new initiatives towards this objective in the current financial year 2021-22. These initiatives require establishment of small but efficient enforcement establishments with operational and logistic capacities. However, the field formations are already facing acute shortage of such logistics including operational vehicles.

The meeting was requested that provision of additional funds are imperative to establish the above systems in an effective and timely manner.

The ECC was further told that despite, being a severely resource constrained organization, the FBR is making all-out efforts to upgrade its existing infrastructure and logistics support to achieve the revenue targets. In the current Financial Year 2021-22, 15 new offices have been created by the FBR but no additional allocation of funds has been made by the Finance Division and there is an immediate need for office space, infrastructure and logistics for its existing establishments as well as newly-created offices.

In the summary, the FBR contended that budgetary constraint is seriously hampering operations and may compromise the achievement of objectives and various heads of the FBR and its field formations have been incurring expenditure under day-to-day basis for the achievement of DLIs under Pakistan Raises Revenue Program and other reform initiatives, resulting in further deterioration of the financial.

It is pertinent to highlight that, in case of non-provision of additional funds adversely affect the FBR’s day-to-day operations shall badly suffer, which would achievement of revenue targets and DLIs/DLRs for the Financial Year 2021-22.

Since the funds are to be spent on project reforms initiatives, the funds are, therefore, requested in the early part of the financial year.

Due to contingent and unforeseen circumstances and reprioritization of reforms initiatives, re-appropriation of Technical Supplementary Grant (TSG) funds may be allowed.

Copyright Business Recorder, 2022

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