A great initiative was taken to facilitate the people of Pakistan regarding the process of taxation via FBR’s e-Portal. However, according to recent press releases on Pakistan’s financial websites, 60% of the problems to businessmen and FBR officials emanated from the portal in question.
According to observations made by the Tax Reform Commission, it doesn’t bode well for the portal’s performance. A myriad of issues is being faced by the stakeholders involved in using this particular ‘support system’ developed by FBR.
The web-based portal was launched and is managed by PRAL (Pakistan Revenue Automation Pvt Limited) in accordance with the policies of the Federal Board of Revenue. The body was created to deal with tax administration automation and related operations; acting as the backbone of FBR. Alas, it is struggling to provide the strength required to play the part as can be foreseen by the incompetence of the e-portal.
Problems in the e-Portal
In 2012, Federal Tax Ombudsman (FTO) Dr. Muhammad Shoaib Suddle told FBR to place a foolproof electronic income tax return on FBR’s official web portal when defectively designed electronic returns came to light. Taxpayers filed their return in accordance with the return placed on the portal. This too led to a revenue loss. This was a prime example of the negligence and inefficiency shown by the department.
Not much has changed since then.
In June 2015, the Federal Government announced the amendments approved by the National Assembly, to be implemented from July 1st. However, the changes in the withholding regime were not consolidated into the online system and FBR had to extend the date for monthly withholding statement, sales tax, and federal excise statements filing.
Then there is IRIS (Integrated Risk Information System) which is an e-return filing platform. PRAL didn’t test this system thoroughly before making it operational. This is obvious because many salaried persons have been reported to have had difficulties in obtaining their user ID, password or pin code which are all necessary in order to use the IRIS system. Even if they did get a user ID and password, they didn’t receive their PIN code.
Sales tax data is not adequately fed. The faults in the system hinder processing of sales tax refunds, cross-matching the data of customs, sales tax, income tax. Data mining is either not possible or is extremely difficult. Not only this, fraudulent sales tax refunds are not detected on time either.
There have also been complaints by the business community about the sales tax registration procedure. There are reports of delays and people who wish to get themselves registered without ‘cost’ have to wait for as long as 6 months. There is no taxpayer folder on the portal, which would track the tax payer’s returns/refunds etc.
In a letter to FBR Chairman Tariq Bajwa last year, the PTBA (Pakistan Tax Bar Association) complained that the current system for Sales tax registration was time-consuming as it required two to three months to get a manufacturing unit registered for sales tax. Furthermore, the existing system was unfriendly and encouraging malpractices instead of facilitating taxpayers.
FBR’s mission is to “Enhance the capacity of the tax system to collect due taxes through the application of modern techniques, providing taxpayer assistance and by creating a motivated, satisfied, dedicated and professional workforce.” The operational ineffectiveness of its e-portal is neither doing anything to enhance the tax system’s capacity nor is living up to the definition of ‘modern techniques.’ Both FBR and PRAL are failing to ensure taxpayers’ ease.
According to the Tax Reform Commission (TRC), the building and operating of an IT system needs to be outsourced so that the latest IT infrastructure is used to provide ease of access. What is required is a dependable database of all tax payments and records and an effortless tax collection system that facilitates transactions and covers record keeping of information, dissemination, and retrieval. There is a dire need for an independent online system to be in place, regulated by FBR but which should be held accountable through audits.
An inefficient e-portal showcases the inefficiency and negligence of the tax department. If FBR aims to apply modern techniques, then it should ensure their effectiveness as well. IT systems introduced by FBR have a direct impact on the economy. If that’s not a good enough reason, we don’t know what is. The FBR e-portal still needs some serious fine-tuning if it needs to become a viable means to file your tax returns online.