Certain key tax reform initiatives being considered by FBR

Some of the key tax reform initiatives being considered by the Federal Board of Revenue (FBR) are declaration of foreign assets owned by resident Pakistanis, reduction in cost of compliance, phasing out of final tax regime, speedy working of Alternative Dispute Resolution (ADRC) committees, Advance Ruling Mechanism for all taxes, simplification of sale tax laws, strengthening of audit functions, electronic monitoring of excisable commodities and mapping of retail outlets to bring them into the tax net.
Sources said on Tuesday that a number of major tax reforms initiatives are under the process of the implementation by the FBR. The FBR will implement these tax reforms as recommended by the tax reforms commission (TRC). In this regard, a meeting of high-powered implementation committee of tax reforms commission (TRC) would be held on February 2, 2017 at the FBR House to finalise timeframe for implementation of the tax reform initiatives by the FBR.
Following are the proposals, decision, timelines and implementation status of the tax reform initiatives recommended by the Tax Reform Commission implementation committee:
1. TRC proposal: Functional and Territorial Jurisdiction. Decision: Approval of three-tier structural reforms regarding establishment of a three-tier structure covering Large Taxpayers Units, Corporate RTOs /Zones and Composite Units in peripheral areas accorded by TRIC.
Remarks: Chief (IR-Operations) to give presentation on the achievements so far.
2. TRC proposal: mapping of retail outlets.
Remarks: FBR Chief (IR-Operations) to give presentation on the progress made/strategy develop-- this regard.
3. TRC proposal: Valuation of property.
Decision: It was decided that draft Rules would be prepared for this purpose.
Further action: Member (IR -Policy) will make presentation on the draft Rules.
Remarks: Member (IR -Policy)
4. TRC proposal: Advance Ruling Mechanism.
Decision: It was decided that an Advance Ruling Mechanism will be devised for all taxes.
Further action: Member (IR-Policy) and Member (Legal) to make presentation on this proposal.
Remarks: Member (IR-Policy) Member (Legal)
5. TRC proposal: IT Strategy for FBR.
Remarks: Presentation by CEO (PRAL).
6. TRC proposal: Committee for simplification of laws.
Decision: During meeting with the F.M it was decided that the agreed Sales Tax proposals may be implemented within a short time.
Further action: Sub-Committee constituting Member (SPR&S), Member (I.R Policy) and Member (Customs) to make recommendations and present the same before the committee.
Remarks: Member (SPR&S), Member (I.R Policy) & Member (Customs).
7. TRC proposal: Framing of Rules regarding whistle blowers.
Decision: The Member (IR-Policy) will frame rules regarding the provisions of whistle blowing through the Finance Act, 2016.
Remarks: Member (IR-Policy) to the committee r-- progress made in this regard.
8. TRC proposal: Ethics and Grievance Redressal System.
Decision: (i) The Grievance Redressal Software shall be made operative after the user acceptance test by the end of the current financial year. (ii) The timeline for the full operation of the Grievance Redressal System be given by the Member (FATE).
Further action: Member (FATE) to apprise the Committee on the progress made.
Remarks: Member (FATE)
9. TRC proposal: Electronic monitoring of production of the Tobacco Industry.
Further action: Member (I.T) to make a presentation on the issue.
Remarks: Member (IT)
10. TRC proposal: Cost of compliance.
Decision: Member (IR-Policy) to devise a framework for the hiring and training of Tax Facilitators before the next meeting of the implementation committee. The existing irritants in the system to be removed by Member (IR-Policy) and Member (IT) within four weeks. The automated feedback mechanism shall be incorporated in the existing to the extent of factual controversies (vi) SA to Prime Minister desired that recommendation(s) regarding constitution and working of ADRC be made by the Member (Legal) in the next meeting of the implementation committee.
Further action: Member (IR-Policy) to presentation on the issue of and Training of tax facilitators. Member (IT) to apprise the Committee on progress made. Member (IT) to apprise the Committee on progress made. Member (Legal) to apprise the committee.
Remarks: Member (IR-Policy) & Member (IT).
11. TRC proposal: Strengthening of Tax Audit Functions.
Decision: Forensic Audit: Member (TPA) to suggest legal amendments for effective audit provisions to be incorporated in the Finance Act, 2016. Member (TPA) to develop risk management system in co-ordination with the World Bank. Member (TPA) to develop a comprehensive compliance program to be developed and advertised through FATE Wing. FBR Member (TPA) to ensure specialised training for audit officers. S.A to Prime Minister suggested that specific qualification criteria may be communicated to the FPSC for induction of the Audit officers. Member (Admn) to send training module to the members of the TRC for their input/ suggestions.
Further action: Member (TPA) to apprise the committee.
Remarks: Member (TPA).
12. TRC proposal: Performance Evaluation.
Decision: It was discussed that KPI's have been finalised with the help of professionals, which were also shared with the TRC. It was decided that further progress be made in this regard.
Further action: Member (HRM) to apprise the Committee in this respect.
Remarks: Member (HRM)
13. TRC proposal: Declaration of assets located abroad by resident Pakistanis.
Decision: It was decided that TRC will give detailed proposal in the matter.
Further action: Abid Shaban to make a presentation on this proposal.
Remarks: TRC.
14. TRC proposal: High level committee to monitor implementation of action plan to reduce the level of underground economy.
Decision: It was decided that Chairman TRC would suggest a proper course of action.
Further action: Masoud Naqvi to make a detailed presentation on the proposal.
Remarks: TRC.
15. TRC proposal: Appellate forums.
Decision: This proposal will be discussed in future meetings.
Further action: Abid Shaban to make a presentation on this issue.
Remarks: TRC
16. TRC proposal: Phasing out of final tax regime.
Decision: It was decided that the matter would be discussed in future meetings.
Further action: Abid Shaban to make a presentation on this issue.
Remarks: TRC
17. TRC proposal: Development of compliance management framework.
Decision: It was decided that the matter would be discussed in future meetings.
Further action: Masoud Naqvi to make a presentation on the proposal.
Remarks: TRC