Pre-budget seminar: Short-term steps dent taxpayer confidence, says ICAP
Problems arise due to FBR’s failure to enforce tax laws.
Problems arise due to FBR’s failure to enforce tax laws. STOCK IMAGE
LAHORE:
The taxation policy is a fundamental part of the overall economic policy and planning of the country, however, recourse to short-term and ad hoc measures has shattered the confidence of good taxpayers, said Institute of Chartered Accountants of Pakistan (ICAP) Council Member Naeem Akhtar Sheikh.
Speaking at a pre-budget seminar organised by ICAP, Sheikh said coercive measures taken due to the budgetary pressures had adversely affected the economy, growth and employment and further increased the budget deficit.
“Most of the problems are stemming from weakness of the Federal Board of Revenue (FBR) because of its failure to implement fiscal laws and ensure compliance with taxation laws,” he said.
Sheikh proposed a review of the structure of policy board that was formed under Section 6 of the Federal Board of Revenue Act 2007. “It should act as a forum to debate the national tax policy in consultation with all the stakeholders.”
The board should be headed by the finance minister and should include the minister of planning and the chairman of respective committees of both houses of parliament, along with the FBR chairman, finance secretary and members of the civil society, he suggested.
Sheikh explained that the primary goal of the revenue authority was to collect taxes and duties payable in accordance with the law. It should be done in a manner to instil confidence in the tax system and its administration.
“The current system is marred by tax evasion, under-reporting, tax fraud, corruption, smuggling and under-invoicing, to name a few.”
He said the solution lay in drawing a comprehensive risk-based strategy and an effective revenue authority to ensure its implementation.
“The FBR headquarters needs to be reorganised with functional specialisation. Four divisions need to be created in the Inland Revenue (IR) department namely operation and enforcement, taxpayer’s audit, registrations (broadening of tax base) and litigation support.”
Published in The Express Tribune, May 1st, 2015.
The taxation policy is a fundamental part of the overall economic policy and planning of the country, however, recourse to short-term and ad hoc measures has shattered the confidence of good taxpayers, said Institute of Chartered Accountants of Pakistan (ICAP) Council Member Naeem Akhtar Sheikh.
Speaking at a pre-budget seminar organised by ICAP, Sheikh said coercive measures taken due to the budgetary pressures had adversely affected the economy, growth and employment and further increased the budget deficit.
“Most of the problems are stemming from weakness of the Federal Board of Revenue (FBR) because of its failure to implement fiscal laws and ensure compliance with taxation laws,” he said.
Sheikh proposed a review of the structure of policy board that was formed under Section 6 of the Federal Board of Revenue Act 2007. “It should act as a forum to debate the national tax policy in consultation with all the stakeholders.”
The board should be headed by the finance minister and should include the minister of planning and the chairman of respective committees of both houses of parliament, along with the FBR chairman, finance secretary and members of the civil society, he suggested.
Sheikh explained that the primary goal of the revenue authority was to collect taxes and duties payable in accordance with the law. It should be done in a manner to instil confidence in the tax system and its administration.
“The current system is marred by tax evasion, under-reporting, tax fraud, corruption, smuggling and under-invoicing, to name a few.”
He said the solution lay in drawing a comprehensive risk-based strategy and an effective revenue authority to ensure its implementation.
“The FBR headquarters needs to be reorganised with functional specialisation. Four divisions need to be created in the Inland Revenue (IR) department namely operation and enforcement, taxpayer’s audit, registrations (broadening of tax base) and litigation support.”
Published in The Express Tribune, May 1st, 2015.