Chairman Federal Board of Revenue (FBR), Muhammad Jehanzaib Khan, has said that a huge reforms agenda has been finalized for FBR in which massive investment will be made with a push towards Information & Communication Technology (ICT) to create an interface between taxpayers and tax collectors in order to minimize human contact.
“Work is also underway on simplification of tax laws and tax policy and we are also in the process of delineating the tax roadmap which would define taxation principles for the next 10 years to be followed for the imposition of taxes, besides devising a roadmap for creating balance between direct and indirect taxes”, he added while exchanging views at a meeting during his visit to the Karachi Chamber of Commerce & Industry.
Jehanzaib Khan admitted that FBR has largely remained focused on the existing taxpayers who are already in the tax net while tax broadening has not taken place. It is also a fact that FBR possesses detailed information about every taxpayer and evader due to massive digitalization but it doesn’t have the capacity to handle and interpret this huge data. “We are trying to build capacity to scrutinize such an enormous data carrying details about the lifestyle of individuals within and outside the tax net”, he assured.
Chairman FBR further said that as a test case, FBR recently issued notices to 6500 individuals outside the tax net with numerous pre-defined parameters including the purchase of property worth more than Rs. 30 million or car purchases by such individuals. FBR assessed a recovery of Rs. 3 billion from these individuals, of which Rs. 1.75 billion have been recovered so far.
He further stated that FBR has been facing a lot of crises mainly due to evasions in GST because of FBR’s own weaknesses. The sales tax has to be administered well by reviewing numerous exemption regimes that have distorted the entire taxation system, he opined, adding that the rate of sales tax can be reduced in due course if its application becomes uniform and all the distortions along with various concessions were removed.
Referring to KCCI’s suggestions about the Asset Declaration Scheme, Chairman FBR assured that KCCI’s suggestions for the next Asset Declaration Scheme will be seriously reviewed and taken into consideration. “We are the custodians of your data and it is our responsibility to keep your data confidential and fulfill the promises”, he assured.
He also agreed that constitutional guarantee and judicial protection must also be part of the Asset Declaration Scheme. “Whatever is possible will be given in the Asset Declaration Scheme and your recommendations in this regard will certainly be reviewed and considered”, he added.