Islamabad: Prime Minister Shehbaz Sharif has decided to personally monitor the reform process in FBR after it was revealed that more than 80 percent of bank accounts in Pakistan are not declared by the tax authorities.
The Prime Minister himself became the Chairman of the Steering Committee which will review the implementation of the approved FBR reform plan. A notification of a separate implementation committee headed by the Finance Minister has been issued 3 days ago.
According to official documents, the prime minister was told in a recent meeting that less than 20 percent of the tax returns submitted to the FBR include bank accounts.
This is an alarmingly low number which shows that the FBR has no knowledge of the wealth and resources in more than 80 percent of bank accounts, which commercial banks are mandated under the existing law to do. Share details of bank account holders and their credit cards with FBR However, banks do not comply with the law and it will be a challenge for the new finance minister who is a banker to actually enforce the law.
Internal details of the meeting held at the Prime Minister’s House show that there was a consensus between the previous cabinet and the Prime Minister regarding reforms in the FBR. It is said that the Prime Minister is fully convinced that the Inland Revenue Service And this is the correct way to separate customs organizations. He decided on the basis of the presentation given by former Finance Minister Dr. Shamshad Akhtar 2 weeks ago.
In the meeting, the Prime Minister decided that he would personally monitor the implementation of the approved reform plan as reforms to increase tax-to-GDP would be the main priority of the government.
The Prime Minister will chair the Steering Committee which will include Finance Minister, Commerce Minister, Industry and Production Minister and Law and Justice Minister.
Other members include Secretary Finance Dwayne, Secretary Ministry of Industries, Secretary Revenue Division, Secretary Ministry of Commerce and Secretary Board of Investment, Chairman FBR has not been made a member of the Steering Committee.
The committee will review the status of implementation of the approved reform plan of FBR and issue instructions for speedy implementation of the reform agenda of FBR.
During the meeting on the FBR reform initiative, the Prime Minister was told that currently only 2.4% of the population files returns as against 6% in India. 55.6 percent of them are zero filers who do not pay any tax.
According to the FBR restructuring plan, Customs and Internal Revenue will be separated. Both the institutions will be headed by the respective Director Generals, both the institutions will work under the Revenue Division.
A Tax Policy Board headed by the Finance Minister will be set up to look after tax policy, revenue targets, coordination, integrity policy, industry consultation, valuation policy and digitization.
The proceedings of the meeting revealed that FBR’s automation process is currently at level one and for a complete transformation it has to be at level three where it will be fully automated.
