- Chairman says FBR will delineate a roadmap that will define taxation principles for the next 10 years
KARACHI: Federal Board of Revenue (FBR) Chairman Muhammad Jehanzaib Khan has said that the FBR reforms agenda has been finalised with a special focus on the utilisation of Information and Communication Technology (ICT) services so as to create an interface between taxpayers and tax collector and to minimise human contact.
“Work is underway on the simplification of tax laws and tax policy. We are also in the process of delineating the tax roadmap which would define taxation principles for the next 10 years. In addition, a roadmap is also being devised to create a balance between direct and indirect taxes,” he said while exchanging views during his visit to the Karachi Chamber of Commerce and Industry (KCCI).
Businessmen Group (BMG) Chairman and former KCCI president Siraj Kassam Teli, BMG Vice Chairmen Tahir Khaliq and Zubair Motiwala, KCCI President Junaid Esmail Makda, Senior Vice President Khurram Shahzad, Vice President Asif Sheikh Javaid, former presidents AQ Khalil, Haroon Agar and Shamim Ahmed Firpo along with managing committee members were also present on the occasion.
Referring to the concerns expressed by BMG Chairman Siraj Teli over the poor attitude and culture at FBR along with trust deficit between tax collectors and taxpayers, he said that organizational reforms are an uphill task in any organisation. However, he added, FBR is ready for the change in its attitude and culture.
“I have absolutely no doubt that a vast majority at the FBR is willing to change in order to come up to the expectations of people,” he stated.
Jehanzaib Khan admitted that FBR had largely remained focused on the existing taxpayers who are already in the tax net while steps to broaden the tax net have not been taken.
“Although the revenue board possesses detailed information about all taxpayers and evaders owing to massive digitalization, it lacks the capacity to handle and interpret this huge data,” he said. “We are trying to build FBR’s capacity in order to handle such an enormous data carrying details about the lifestyles of individuals within and outside the tax net.”
The FBR chairman further informed that as a test case, FBR recently issued notices to 6,500 individuals outside the tax net with numerous pre-defined parameters, including purchase of property worth more than Rs30 million. “FBR assessed a recovery of Rs3 billion from these individuals, of which Rs1.75 billion have been recovered so far,” he added.
He stated that the board has been in crises mainly due to sales tax evasion, adding that sales tax has to be administered well through revisions in numerous exemption regimes that have distorted the entire taxation system.
“The rate of sales tax can be reduced if its application becomes uniform and all the distortions along with various concessions were removed,” he opined.
Referring to KCCI’s suggestions with regard to the Asset Declaration Scheme, the FBR chairman assured that KCCI’s suggestions for the next scheme will be seriously reviewed and taken into consideration. “We are the custodians of your data and it is our responsibility to keep it confidential,” he assured.
He also agreed that constitutional guarantee and judicial protection must also be part of the Asset Declaration Scheme.