ISLAMABAD: The Federal Board of Revenue (FBR) has constituted a Steering Committee for implementation of Inland Revenue (IR) Strategic Reform Plan (2021-2025) covering reform actions to improve tax administration in four strategic reform areas, i.e., improving tax compliance, strengthening tax administration, building institutional capacity, and reinforcing legislative framework.
According to a notification issued by the FBR here on Monday, secretary Revenue Division/chairman FBR has constituted a Steering Committee headed by Chairman FBR.
Members of the committee are Member (IR-Operations), FBR; Member (Reforms & Modernization), FBR; Member (IR Policy), FBR; Member (Audit & Accounting), FBR; Member (Information Technology), FBR; Member (Legal-IR), FBR; Member (Public Relations), FBR; Director General, Withholding Taxes, FBR; Director General, Revenue Analysis, FBR and Chief (Tax Reforms), FBR would work as the secretary of the committee.
Member (IR-Operations), FBR shall be Head of Committee in the absence of the chairman FBR, the notification added.
Inland Revenue plans to address the challenge of low tax compliance through implementing a compliance risk management capability; improving registration, filing, payment and reporting compliance; reducing the cost of compliance, strengthening the audit capability, streamlining processes, and procedures.
Needless to add that greater use of automation for better service delivery and data-centric approach is a key reform area. 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.
Inland Revenue also endeavours to improve the skill set of its workforce and simplify and standardize the IR procedures by providing a common tax code. The IR Strategic Plan will be reviewed on an annual basis to ensure the programme is still a sustainable and viable reforms strategy. The envisaged reforms have the potential to structurally improve the performance of the tax system and make significant contribution to revenue mobilization.
The report said the FBR had chalked out an Inland Revenue Service Strategic Reform Plan (2021-24) to remove multiplicity of taxes/rates and jurisdictional overlapping, strengthen audit functions, increase number of taxpayers, increase electronic services to taxpayers and redesign Inland Revenue Services (IRS) processes.
The plan will make the FBR a data-centric tax administration and improve performance in the foundation compliance pillars of registration, filing, payment and reporting and ensure that the FBR is seen as a tax administration with integrity.
The plan has identified four objectives to improve the overall compliance with taxation laws and to increase our revenue collections.
The objectives are to implement a compliance-risk management capability; improve registration, filing, payment and reporting compliance; reduce the cost of compliance; strengthen the audit capability and streamline processes and procedures. The reform actions set out in the Strategic Reform Plan constitute the reform programme which will guide IRS transformation. The reform programme implementation will be closely monitored, and would entail regular reviews and course correction, as and when required.
According to the plan, the key constraints to revenue mobilization at the federal and provincial levels include a narrow tax base fraught with exemptions and low registrations; weak tax policy design; and complex and fragmented tax administration due to which compliance is required for too many tax authorities and laws.
The reform programme is based on an analysis of the strengths and weaknesses of tax administration informed by internal assessments and a recent externally conducted tax administration assessment.
Copyright Business Recorder, 2022
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