Prime Minister Shehbaz Sharif while giving in-principle approval to the proposed roadmap for the automation system of the Federal Board of Revenue directed that this roadmap should now be implemented with a clear timeline.
According to the PM’s Secretariat, a high-level meeting was held under the chairmanship of PM Shehbaz Sharif regarding the privatization of PIA and the restructuring of the FBR.
In the meeting, automation of FBR, ensuring transparency in the system, structural reforms according to global standards, increase in tax through incentives, elimination of corruption and smuggling, separation of Inland revenue and customs departments and tax rates were discussed.
PM Shehbaz Sharif while giving in-principle approval of the proposed roadmap of the FBR automation system directed that now this roadmap should be implemented within a clear time frame.
“The targets should not only be realistic but also the fastest in the region in terms of speed of implementation,” he said. “We have to work round the clock to achieve this goal,” he added, emphasizing, “We don’t have another moment to waste.”
This is the question of Pakistan’s bright future and economic recovery, he added.
The PM on this occasion directed the Ministry of Law to immediately make recommendations for the resolution of pending cases and legal disputes in the courts related to tax collections and revenue so that the obstacles in the way of disbursement of Rs. 1.7 trillion to the national exchequer can be resolved.
The PM also directed the Ministry of Law to submit proposals regarding the establishment of a legal department in FBR, making the drafting in accordance with the law and hiring the services of lawyers.
The Prime Minister said that a 6 to 7 percent national growth rate can be achieved only as a result of the implementation of reforms.
PM Shehbaz Sharif said, “We have to invest to modernize our revenue and tax system.” He added, “We want to introduce an incentive-based tax system.”
There is every desire to reduce the tax burden, but the business community also has to play its role in the development and social service of the people, he added.
The Prime Minister said, “We have to ensure an effective third-party audit system, in which our system has failed so far.” He emphasized that there are coin systems in the world which we can improve by adopting them.
The Premier said that exemptions given on all taxes should be fully checked. He added that if SMEs had been developed, today Pakistan would not be behind the developed countries of the world.
Small and medium-scale industries could not be encouraged in forty years, he said, adding that now this sector has to be promoted.
Former Caretaker Finance Minister Dr. Shamshad Akhtar gave a comprehensive briefing on FBR’s restructuring, automation, various aspects of deficiencies in revenue collection and future action plans.
Dr. Shamshad Akhtar told the meeting that Tax to GDP in Pakistan is less than 9.5% compared to the rest of the world, which is very important for the development of Pakistan.
She explained that 55.6 percent do not pay any tax while only 3.3 percent pay tax over 0.2 million people pay 90% tax.
She said that Rs 1.7 trillion of Pakistan is stuck due to the legal process. The proposals for the establishment of a Federal Policy Board, restructuring of the Customs Department on the pattern of other countries in the world, and reforms in the legal and regulatory framework. The Federal Policy Board will formulate long-term tax policy to ensure policy continuity.
At the beginning of the meeting, the Prime Minister welcomed Dr. Shamshad Akhtar and said that he personally thanked her for his efforts today. The Prime Minister said that it is a fact that Senator Ishaq Dar had built a solid foundation with the IMF. Due to which progress was made possible later in this matter. The Prime Minister paid tribute to Dr. Shamshad Akhtar, describing her presentation as comprehensive.
It should be noted that the Cabinet of Caretaker Prime Minister Anwar-ul-Haq Kaktor had also approved the automation of FBR and the separation of Inland Revenue and Customs Departments, however, IHC granted a stay when one IRS officer filed a petition in court.
According to FBR’s notification, FBR had also placed the IRS officer on the admin pool who filed a petition in the court against the proposed FBR reforms last month.