Sunday 7 August 2016

FBR awaits Dar’s nod to implement new plan



ISLAMABAD: The Federal Board of Revenue (FBR) is awaiting Finance Minister Ishaq Dar’s approval to implement a plan that would extend its reach to new districts besides restructuring its existing set-up in major cities, an FBR official told Dawn on Saturday.
The original plan has already been delayed by one month and now it is being implemented from Aug 1. The tax machinery expansion is believed to help increase the narrow tax base and generate maximum revenue for the national exchequer.
After the complete implementation of the plan, the FBR estimates that revenue collection will reach Rs7 trillion from the existing Rs3tr within the next three years. The number of people who are on the tax roll is also estimated to reach six million from the current 3.93m.
The cost of the implementation is estimated between Rs1.5 billion and Rs2bn. This amount is required to establish 11 new non-corporate chief commissionerates and 12 new independent corporate commissionerates.
The official said this is the first phase of the tax administration reforms, which will be extended to all areas after approval of the competent authority.
The new reforms revolve around the idea of separating corporate taxpayers from non-corporate ones, and judge the performance of the tax officers in terms of revenue collection and improving tax compliance.
In Karachi, the existing two large taxpayers units (LTUs) will continue to work on the basis of functional system, where dedicated officers will perform specific jobs of assessment, audit, recovery and appeal.
The existing regional tax office (RTO)-I in Karachi has been converted into a corporate RTO. All those corporate cases other than those in the existing LTUs were transferred to the RTO-I. The remaining RTO-II and RTO-III in Karachi were specified for non-corporate cases in Karachi.
The non-corporate offices will work on a circle-based system, in which the officer in charge will handle all the responsibilities, ranging from assessment to recovery of taxes in his/her area or circle of operation.
In Lahore, the LTU will continue to work on the same pattern. In the two RTOs in Lahore, the RTO-I was converted into a corporate one, while the RTO-II was dedicated for the non-corporate cases. The RTO was also extended to mufassil areas of the adjacent areas in Lahore division.
In Peshawar, the RTO was restructured by creating new zones. A dedicated commissionerate office was established for corporate cases of the city, while a commissionerate office was created for non-corporate cases. Two zones were created in Dera Ismail Khan and Mardan to cover the mufassil areas of Khyber Pakhtunkhwa.
In the Rawalpindi RTO, a dedicated commissioner office was created for the corporate cases, while commissionerate offices were also established for non-corporate cases in the Rawalpindi city and mufassil areas of the division.
In the Multan RTO, cases for corporate and non-corporate were separated by creating a commissionerate for corporate and non-corporate zones.
The structural reforms in the field formations of the Inland Revenue wing of the FBR revolve around a three-tier system — LTUs, corporate zones and mufassil commercial zones.

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