Filing tax returns: Not quite ready for the IT revolution

In Pakistan, it is best to do it the old-fashioned way.

Imran Khalil March 21, 2011

A reminder in my diary recently went off for filing my company’s advance quarterly tax return. My firm is a small-sized one and being an ACMA from the UK, I thought it would be much easier and cost-effective for my company to file this online.

I asked my staff to go online on to the Federal Board of Revenue (FBR) website and search for the template through which the tax return could be filed. Having spent a good few minutes they were unable to find the template or the link. I then told my staff to call the E-FBR helpline team on the number which is advertised in the newspapers.

They called and were kept waiting in the queue for more than half an hour just to get through to one of the E-FBR phone advisers. One thing I have figured out about filing online returns is that the FBR site tends to work like the local laidback culture in Pakistan. This means that if you try to file a return before 9:30 am, the site won’t work, and similarly if you try around lunch time or after 4:30 pm I found it not working.

This left my company with a few hours when the site apparently works and the returns can be filed electronically. This is quite contrary to online filing anywhere else in the world which works round the clock. However, the FBR site, at least from my own experience, tends to work like a human being.

After waiting for half an hour, my staff finally managed to put me through to the online help team and one of them said that we couldn’t find the link because none was available. I was totally gob smacked at this reply and astonished and had no words to say to the FBR phone adviser. She further told us that the FBR are currently working on it and that the said link would be enabled as soon as this was done. I asked her that would it be available before the deadline date for companies filing which was March 25 and the reply was “I am not quite sure and chances are that it won’t be”. I asked her what if we miss the deadline due to the link not being available and to this she replied: “So just put a note when you file later that the link was not available.”

What I don’t understand is why do the FBR people say that people in this country don’t file returns and likewise companies also don’t do that and we all are non-compliant. I have also read many articles in the press where emphasis is put on Pakistan to widen its tax net. My case is a prime example where I tried my best to file mine and my company’s returns before the deadline but the system is so cumbersome that one gave up the option of filing online. What my staff eventually did was to my RTO and get a paper return which was quite a hassle since it is a waste of a working day. Why cannot the FBR make the online filing of returns user-friendly? Why can’t all the necessary forms be uploaded on the website and the relevant links enabled before such an option for taxpayers is publicised?

This was also evident from the case of the recently-finalised capital gains tax rules on shares, where it took the FBR over eight months to finalise them after announcing the tax policy and still so far has been unable to issue the agreed-upon amendments. No wonder we say that we have a very low retail investor base in our stock markets. How will an investor invest if for eight months in a year people don’t know how they will be taxed?

We must get our acts together and re-structure the FBR according to the best practices in the world. I don’t agree with the oft-repeated statement that individuals and companies don’t comply with FBR rules and regulations since my example clearly shows that part of the blame must lie on the shoulders of the FBR. Until FBR removes the human interface from the system the tax net will remain small and people will continue to be hesitant to file timely tax returns.

The writer is a Chartered Accountant and member of the ACMA-UK

Published in The Express Tribune, March 21st, 2011.


Adeel Rahman | 10 years ago | Reply The writer is my good friend and I feel sorry for he had to face an unpleasant experience while dealing with FBR to file tax return. Will responsible individuals at the FBR care to respond and apologize for the inconvenience my friend endured and to all other such people who want to file return but find it difficult to do so because of inefficiencies that prevail at the FBR. Only we can change our country's destiny for good of all.
Shahbaz Gul | 10 years ago | Reply A very informative article regarding the situation of tax in Pakistan.
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