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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