Proposal for formation of dedicated division at FBR

1- Purpose of Dedicated Division Formation

Existing Structure:
FBR has a complex mechanism for exporters/business/trader facilitation, which is difficult for average user with limited technical capacity. Following systems are in place in FBR: IRIS, E-File Taxpayer Facilitation Portal, IRIS-ADX Application, Centralized Sales Tax & FED Assessment & Processing (CSTAP), Pay-Sys, Risk Management System (RMS), Sales Tax Return Automation System, WEBOC, One Customs Software.

Proposed Solution:
In addition to the existing structure which is not only confusing but non user-friendly as well, there are numerous issues faced by trader/business from initial registration to becoming a taxpayer with FBR. There is a need to establish a dedicated division to:

a) Facilitate the existing taxpayers largely paying 70% of the taxes per annum;
b) Support the foreign prospect companies to be registered in Pakistan to initiate new projects either through joint ventures or establishing their own existence

The proposed division will be reporting to Chairman FBR with user-friendly software and direct & easy communication for clients. The division will have:

a) Competent & suitable HR to be hired from the Market
b) Dedicated and user-friendly web portal having limited to no human interface
c) Digital walk-through for international companies for easy registration process in Pakistan d) Simplifications of procedures and forms
e) Random auditing mechanism through automated system.
f) FBR existing divisions of ‘Integrity Management Cell’ (IMC) for facilitation of taxpayers and unit named ‘Tax Information Processing Unit’ (TIPU) will also be integrated within this division.

2- Operating and maintenance cost

This division will be operating as an integral part of FBR for facilitation of large taxpayers/business. Since a certain percentage of FBR work will be undertaken by this division so FBR needs to allocate annual operating budget for this division, covering salaries of HR, maintenance, hosting and upgrading of software, connectivity, training and facilitation budget, communication and other operational expenses. The same audit requirements would be applicable on this division which is applicable for FBR.

With this new division having HR from the private sector, the employee retention may be an issue for FBR, keeping in view limited vertical growth and restricted remuneration packages under Finance Division for contractual employees. FBR may need to look into this issue and undertake legal amendments in its Act in order to establish this division as a sustainable model.

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