KARACHI: The government has received an undisclosed amount from the World Bank to revamp the taxation system, which will be utilized by the Federal Board of Revenue (FBR) to employ professionals for identifying revenue spinners and rein in tax evasion.
According to sources, the tax regulator will employ economists having PhD or a master’s level degree, possessing work experience and ideally provide prudent services to boost revenue collection, reports The News.
The employing of these individuals by FBR would be made under the World Bank-funded program, ‘strengthening tax system and building tax policy’.
In this regard, the government has been provided with a grant by the Washington-based lender.
Initially, the tax regulator will engage two economists for market monitoring and intervention (MMI), two for tax intelligence unit and one expert to discover gaps in the tobacco industry.
The role of the economists at MMI would be to scrutinize trends in latest tax evasion techniques and devise proposals to control it.
Moreover, the intelligence unit will be responsible for improving organizational efficiency by establishing a link between FBR and the field staff.
Sources told the tax regulator is expected to raise more revenue from the sale of cigarettes in Pakistan.
Also, a consultancy in tax stamp would be purchased to prevent tax evasion in the tobacco sector.
According to the tax regulator, the tax evasion is thriving because of smuggling and non-duty paid domestically produced cigarettes being available in the market.
It said in a report, “To avert this tax evasion, it is intended to place a tax stamp on each cigarette pack to track and trace capability.”
And the sources said there was no official research available on the amount of tax evasion from the sale of cigarettes in Pakistan.
Hence, the tax regulator was looking to receive technical assistance from a sector specialist for e-stamping of tobacco products.
According to sources, the tax regulator via two different kinds of researches would unearth tax avoidance and evasion trends.
The economists employed would be given responsibility to carry out research on emerging businesses like ride-hailing services, where taxation is a complex occurrence.
Furthermore, the sources told the tax regulator was planning to carry out research to unearth flaws in public-sector enterprises.