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ISLAMABAD: Pakistan Business Council (PBC) has asked the Federal Board of Revenue (FBR) to effectively use financial data including gains made in the Pakistan Stock Exchange for broadening the tax base.

According to the budget proposals of the PBC for 2022-23 received at the FBR’s headquarters, the mining of the FBR’s database is necessary to identify new taxpayers and those not fully discharging their liabilities.

The FBR has got access to financial data in various forms including the monthly statements submitted by withholding tax/collecting agents as per various sections. Information as per statement under sections 165A, 165B, 175A, and Nadra, FIA, Bureau of Immigration and Overseas Employment records are also available. This can be a start to bringing new taxpayers into the net.

In addition, the FBR has also collected data about the tax paid by non-filers on vehicles, immovable property and on gains made in the stock market.

The low taxpayer base has increased reliance on existing taxpayers. The number of taxpayers needs to be significantly increased – the narrow taxpayer base is leading to greater pressure on the existing taxpayers, the PBC added.

FY23 Budget proposals: PBC for discouraging cash economy

The FBR’s new reform plan revealed that the data-centric administration will be developed by valuing the importance of data and adopting data-based decision making. We will improve our ability to manage existing data and expand our sources for data. The risk-based compliance management approach will be based on leveraging data to identify, prioritise, and action compliance risks.

The FBR added that the documentation of economic activities through data exchange/linkages would be done. This reform area will integrate the FBR’s internal databases and improve data linkages with third parties required to provide information to the FBR, such as withholding agents. It will create accessible databases where economic activities exist by creating data-generating processes, and rendering information on taxable income and transactions, the FBR added.

The FBR will build on two previous reform investments which have improved our information technology services and data collection and storage. The key challenge is to build on the work to date to deliver integrated information technology systems which will provide benefits to both the citizens of Pakistan and the FBR.

Greater use of automation will improve our service delivery.

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.

Copyright Business Recorder, 2022

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