Awareness of tax related matters: FBR survey shows astonishing results

A national tax survey conducted by the Federal Board of Revenue (FBR) showed astonishing results that different categories of taxpayers are totally unaware of their tax obligations, rights/understanding related to taxation and functioning of FBR with lack of confidence in the tax machinery.
Sources told Business Recorder here on Wednesday that a private company had conducted a 'Stakeholders Perception Survey" on behalf of the FBR. The FBR has hired a foreign company for carrying out a national survey to know about the perception of the taxpayers about the FBR and its field formations.
The survey was conducted on the basis of samples of 3000 respondents covering three main categories of stakeholders companies (large companies, medium businesses and small businesses), salaried individuals (government and private employees), and other stakeholders (tax authority officials, trade bodies' representatives, leaders from NGOs, tax intermediary agents and non-tax payers).
The crux of the survey is that a) taxpayers are unaware of the benefits of the self-assessment scheme, b) taxpayers are dissatisfied with audit selection process, c) small businesses and NGO/opinion makers talked about low level of transparency in FBR, d) people are not ready to report tax evasion to FBR, e) lack of confidence in FBR, f) people have negative attitude about transparency in decision making for tax audits, g) dissatisfaction over the performance of the Web-Based One Customs clearance system, h) some categories of taxpayers are unaware of their tax obligations.
According to the key findings of the "Stakeholders Perception Survey", it was observed that FBR has arranged workshops/seminars for large taxpayers which have yielded results as large taxpayers have rated reform initiatives positively. However, strategy to address small businesses needs to be devised, based on the considerations including low literacy rate; low level of IT skills and limited access to ICT.
The results of the survey said that to broaden the tax net and explore the untapped potential it is vital that potential tax payers are targeted to develop the positive perception about FBR. However, the results of current study showed that many categories of respondents are highly unaware of their tax obligations, rights and understanding related to taxation and functioning of FBR.
As per survey results, a large proportion of respondents said they would not report tax evasion to FBR. It is imperative to understand the underlying concept which has developed such an attitude among the people that they lack confidence in reporting a matter which is very crucial to broaden tax net. It's fundamental that a culture be developed in which people do not hesitate to fulfil social responsibilities. Informative campaigns can help to educate the masses.
A significant proportion of respondents did not have positive perceptions among trade bodies, legal experts, large taxpayers and overall about transparency in decision making and helping in future tax audits. This needs to be improved to create more positive perceptions amongst respondents, the survey said.
The survey results further showed that majority of agents/intermediaries, being highly aware segment of taxpayers, are critical about the performance of Web Based One Customs (We-BOC). They believe that We-BOC has neither reduced time for clearance of goods nor the dwell time at the port in order to reduce port congestion. It has also not reduced the cost of doing business. "We believe that the implementation of We-BOC along with proper training of the application to the FBR staff be expedited to get more accurate results about its performance and benefits", survey results said.
The survey further said that a comprehensive program of local and foreign trainings was undertaken by FBR under Tax Administration Reform Project (TARP). A significant proportion of FBR employees showed their reservations about the efficient and effective use of training fund. FBR officials suggested that the identification of training needs should be streamlined and HR should consult relevant departments while devising the training plan.
The survey further stated that a large proportion of employees are not confident of the application of training on the job. Therefore, practical application of trainings should be considered. Key performance indicators (KPIs) should be developed to monitor and gauge the application of knowledge gained through trainings.
It was observed that some of the stakeholders were not satisfied with the FBR staff interacting with the customers. Besides technical training, soft skills of front desk staff should also be more emphasised. There is a critical need to create awareness about universal self-assessment scheme (USAS) because of the factors that the taxpayers are not aware of the benefit of USAS and taxpayers are not comfortable with the selection process for tax audit.
It was observed that efficiency of FBR can be enhanced by improving navigational capacity. Overall transparency has improved. However, small businesses and NGO/opinion makers rate low level of transparency in FBR. One of the reasons could be the unawareness among these stakeholders. Moreover, tax filing procedure needs to be further simplified, survey findings added.