Reforms helped CBR achieve targets, World Bank told

The reform process has helped the Central Board of Revenue (CBR) in achieving revenue targets during the last two years against previous financial years' when even revised targets were not met by the tax authorities.
CBR Member Tax Policy and Reforms M S Lal in his presentation to the World Bank (WB) on Tuesday said that revenue targets were not revised downwards during 2002-03 and 2003-04 as compared to the targets fixed in 1990-91 to 2001-02.
During 2002-03, the CBR surpassed the actual annual target of Rs 458.9 billion by collecting Rs 460.2 billion, ie, an increase of 100.3 percent. In 2003-04, the CBR collected Rs 517.1 billion against the original target of Rs 510 billion, reflecting an increase of 101.5 percent. M S Lal said that the CBR has managed to surpass revenue targets through healthier tax policies, better investment in IT and broadening of tax base.
The CBR would make serious efforts to increase tax-GDP ratio every year under the tax administration reform plan. On the issue of tax exemptions, he informed the World Bank that except a few most of the exemptions have been taken away.
He said that the CBR has achieved a world-class level of taxpayer compliance through smooth implementation of reforms.
Elaborating on the autonomy of CBR, the Member Tax Policy and Reforms said that enhanced autonomy would be instrumental in formulating expenditure and resource budget.
The cabinet committee has enough powers to take decisions regarding approval of budget and devising policies for the CBR. It is a better arrangement to operate as a part of government organisation. The tax machinery would be more secured while operating under the government.
Lal while quoting recruitment process of the Federal Public Service Commission (FPSC) said that FPSC still provides a strong base for proper recruitment of tax officials.
He also briefed the participants in detail on different aspects of the TARP, including reform strategy, design and various projects in the reform implementation plan.
The participants were also given update on the pilot projects already started under TARP like Large Taxpayer Unit (LTU), Medium Taxpayer Unit (MTU), Sales Tax Automated Refund Repository (STARR), STREAM and Customs Administration Reform Plan (CARE).
A separate briefing on automated customs clearance was also given by CARE Project Director Azhar Majeed Khalid.
The project when operational would reduce the clearance time of goods from the present 8-10 days to 24 hours, greatly reducing the cost of doing business.
The CBR's Tax Reform programme is expected to be completed by December 2007 by which time all the CBR tax and customs officers will be upgraded with modern communication facilities.
In the new reformed offices work will be fully computerised and taxpayers will not need to visit offices for routine activities like filling returns, refund applications, etc.
With end-to-end automated process work like processing tax returns, import and export manifests will then be done in days and hours instead of taking months and weeks. The ultimate outcome will be taxpayer-friendly environment; simple processes, efficient tax machinery and greater revenue, Majeed added.