ISLAMABAD: The task force on tax and Federal Board of Revenue (FBR) reforms, constituted by the finance minister has yet not become fully functional to submit recommendations on activities to develop proposals/ measures for ease of paying taxes.
The FBR had notified the constitution of the taskforce on September 27, 2023. As per notification, the taskforce shall submit its recommendations within two weeks period. However, the task force has yet to become fully operational for submitting recommendations on tax reforms.
The taskforce has the mandate to review tax policy measures to capture optimal tax base, correct tax gaps, and enhance economic efficiency and equity of the tax system.
One of the key terms of references (TORs) of the taskforce is to identify hurdles/ bottlenecks in tax collection and suggesting concrete technology-based measures to cope with the problems.
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The taskforce would examine the tax expenditures of the government and propose a mechanism for cost-benefit analysis for any proposal of tax exemptions.
It would give recommendations on the use of information technology to maximise tax compliance, enforcement, tax base broadening, facilitation and transparency and accountability.
The taskforce would prepare and submit to the government a comprehensive report, focusing on missing elements, proposing short-term, long-term revenue and reform measures, including restructuring of tax administration and changes in laws for bringing efficiency in increasing tax collection.
It will present a vision of tax system, both tax policy and administration for Pakistan in the long term.
The taskforce will also perform activities to develop proposals/ measures for ease of paying taxes. It will propose implementation plan for separating revenue collection and tax policy. The taskforce will also review FBR tax collection data and relevant analyses and review tax system performance indicators and reporting mechanisms and identify areas of revenue performance and potential.
It will review the access of FBR to the internal and third-party data and its use in the tax administration and seek proposals from relevant agencies on developing further data use in enhancing collection efficiencies and lowering compliance and administrative costs.
It will carry out a review of the ongoing tax reforms, their alignment with national policies and objectives, and assess implementation progress and examine tax evasion, smuggling, corrupt practices, and other leakages and shortcomings proposing concrete counter measures.
The taskforce will identify critical structural reforms of the tax administration, human resource requirements, and redressal of taxpayer grievance mechanisms, incentive alignment for tax collection, facilitation and compliance patterns, and other gaps and way forward for efficient tax collection.
It will examine collection mechanisms of sales tax, income tax, assessment of import goods and online tax system, including study of system audit reports, for proposing measures to plug loopholes.
Copyright Business Recorder, 2023