In a four-hour review meeting focused on Federal Board of Revenue (FBR) reforms and digitisation, Prime Minister Shehbaz Sharif instructed FBR officials to incorporate 4.9 million wealthy individuals into the tax net without placing additional burdens on the poor. The session, held on Thursday, included briefings on the progress of Inland Revenue and Customs reforms over the past eight weeks.
According to a statement from the Prime Minister’s Office, the digitisation process of the FBR is being overseen by the internationally renowned consultancy firm McKinsey, with promising initial results.
Prime Minister Sharif highlighted a significant achievement: “In the last four months, an Rs800 billion tax refund fraud was detected. We will further improve the tax refund system,” he said. He expressed concern over delays in several FBR reform projects, describing them as “extremely regrettable.”
The FBR briefing revealed that 83,579 tax-related cases, amounting to Rs3.2 trillion, are pending in various courts and tribunals. “Since the current government’s tenure, various measures have been taken to resolve tax cases, with 63 cases worth Rs44 billion settled in the last four months,” an FBR spokesperson noted.
Advanced technology has identified 4.9 million individuals with the capacity to pay taxes. The prime minister directed FBR officials to prioritise taxing the wealthy among them while sparing the poor.
The meeting also discussed the FBR’s trader-friendly mobile application, which has registered 150,000 retailers since April 1, 2024. PM Sharif urged continued consultations with retailers to enhance this system’s effectiveness.
The premier instructed an increase in the number of appellate tribunals to expedite tax case resolutions, aiming for 100 tribunals. He also ordered the establishment of a performance dashboard for these tribunals.
PM Sharif emphasised that there should be no delays in the payment of sales tax refunds and called for an immediate strategy to recover illegal refunds granted in the past. “The Fraud Detection and Investigation Department of the FBR must be fully digitised,” he asserted.
He further directed the integration of all ongoing FBR reform projects into a centralised system, advocating for the use of state-of-the-art technology and skilled personnel in digitisation efforts.
“There will be no delay in providing funds for upgrading the customs system,” PM Sharif affirmed. He instructed the FBR to present strategies for new system software design and implementation, and for reforms in the Pakistan Revenue Automation Authority (PRAL).
The FBR officials announced the implementation of the Integrated Transit Trade Management System (ITTMS) at the Pakistan-Afghanistan borders of Torkham and Chaman starting October 2024. “International standard one-window facilities will be established,” they said.
The development of the Automated Entry-Exit System (AEES), based on advanced scanning technology and linked to the Web-Based One Customs and Pakistan Single Window, has also begun. Initially, AEES will be implemented at Karachi’s four ports and the airports in Karachi, Multan, and Peshawar. PM Sharif has also instructed its implementation at Gwadar port.
Lastly, FBR officials introduced the Single Sales Tax Return system, already implemented in the telecom sector, which will connect FBR with revenue authorities nationwide. PM Sharif mandated the application of this system to all taxpayers by October 2024.
