Tax reforms: World Bank delegation expected in April

First phase of reforms project to be completed by 2012.

ISLAMABAD:

A high-level delegation of the World Bank will visit Pakistan in April to discuss and finalise various proposals to implement the Tax Administration Reforms Project-Two (TARP-II).

The delegation, headed by World Bank official Carlos Silvani, is expected to arrive in the first week of April.

Federal Board of Revenue (FBR) officials said that the World Bank had earlier given its approval for TARP under which tax-to-gross domestic product ratio will be increased, automation will be introduced and reforms will be undertaken in the new Inland Revenue department.

According to a proposal, Tarp-II should be completed in two phases, with the first phase to be completed by 2012. Sources added that more reforms will be introduced under the project to broaden the tax net and raise the tax-to-GDP ratio.

The World Bank mission will prepare a report after reviewing the pace of the reforms project, after which the bank’s board of directors will give an approval for implementation of the second phase. Approval for the first phase has already been received.

The visiting delegation will hold meetings with Ministry of Finance officials and other relevant authorities and will be briefed about the progress made on implementation of reformed general sales tax (RGST) – which is to replace the present general sales tax system.

Sources added that the delegation will be assured that FBR is all set to widen the tax net, as final drafts of rules and regulations and procedures have been prepared.

The delegation will also review the fastest sales tax refund system to be introduced by FBR to speedily settle tax claims which in some cases remain blocked for months.

Published in The Express Tribune, March 6^th, 2011.