Prime Minister Shehbaz Sharif has directed expedite the implementation of ongoing reforms in the Federal Board of Revenue (FBR) and make the tax collection system more effective. He clarified that action will be taken against corruption and persistent poor performance, while officers and officials who improve performance will be given an opportunity to reform.
A weekly review meeting on the affairs of the FBR was held under the chairmanship of the prime minister on Monday. On this occasion, he termed the initial results of the reform measures as encouraging and stressed increasing the capacity of the institution to prevent tax evasion.
The meeting was informed that during the last three years, the estimated tax gap in the country has reduced from 6 percent of the gross domestic product (GDP) to 5 percent. The tax gap refers to the difference between the potential tax collection and the tax actually collected.
The meeting was also briefed on measures to improve the FBR system through modern technology, increase transparency in office operations and limit arbitrary interference in the powers of officers.
The Prime Minister directed to speed up the implementation of the faceless system in the relevant areas of tax collection. The aim of this system is to improve transparency by reducing direct contact between taxpayers and relevant officers and to limit the possibilities of unnecessary interference.
The meeting was informed that 957 third-party auditors have been recruited on merit to increase the audit capacity in the FBR, as a result of which the audit capacity of the institution has increased fourfold. Along with the training of newly recruited officers, training programmes are also underway for the already serving officials.
The Prime Minister directed that indiscriminate action should be taken against corrupt elements in the institution. He said that employees who demonstrate good behaviour and performance should be given an opportunity to reform themselves; however, there will be no place in the institution for those who continue to engage in corruption and poor performance.
The main objective of the FBR reforms is to make the tax collection system transparent, reduce the chances of tax evasion and increase the revenue available to the national exchequer. The real success of these measures can be gauged from the results of tax collection, expansion of the tax net and administrative efficiency in the coming period.
