The Central Board of Revenue (CBR) is working on a mechanism to verify sales tax invoices through a computerised system to end manual filing.
The computerisation of sales tax invoices was discussed in the quarterly conference of collectors of sales tax and federal excise and collectors (appeals), held here on Friday. Secretary General, Revenue Division/Chairman, Central Board of Revenue, M. Abdullah Yusuf presided over the conference.
It was agreed to replace manual system of filing invoices with computerised invoices checking system to verify authenticity of refund claim. In this regard, a software would be developed to control bogus refunds, sources added.
The conference reviewed, in detail, the performance of the Collectorates in first nine months of current financial year (2006-07) and discussed ways and means to achieve the annual targets in the remaining period ie up to June 30, 2007.
Speaking on the occasion, the Secretary General reminded the collectors of their responsibilities towards successful implementation of on-going tax reforms programme "We have a big challenge ahead. A huge reliance is being placed on us. We have to come up to the expectations of the government for which extra-ordinary efforts and commitment of each and every employee of CBR and its field offices is required," he remarked.
The Chairman was confident that within the next few months a visible change would be witnessed. "Our ultimate objective is to transform CBR into an efficient, friendly, automated and transparent organisation which could benefit all the stakeholders," he added.
Briefing on the overall achievements of the collectorates, Secretary (Sales Tax & Federal Excise), Wajid Ali informed that the total sales tax collection in first three quarters (July-March) was Rs 218.8 billion which was 8 percent more than the collections achieved in the corresponding period of the last financial year (2005-06). Similarly, the collection of federal excise in first nine months was Rs 48.0 billion as compared to Rs 39.6 billion in 2005-06, indicating a growth of 20 percent.
Total sales tax collections from the imports was Rs 125.7 billion which was 3.8 percent more as compared to the corresponding period of the last financial year.
Conference was informed that various sectors have shown positive growth in sales tax collections in first nine months of current financial year. They included telecom (40percent), POL (11percent), sugar (42percent), services (15percent), beverages (20percent), cigarettes (24percent) etc.
However, there were some sectors which have shown either less or negative growth in first three quarters of current fiscal. They included natural gas (3 percent), cement (2.3 percent), motor cars (-68 percent), fertilisers (-40 percent), paper (-28 percent) etc.
Conference was informed that reasons for shortfall in cement sector included price reduction during current financial year, shortfall in ST growth in natural gas was mainly due to increase in zero-rated domestic supplies of distribution companies, increase in input purchases etc; in case of motor cars the reasons for shortfall in sales tax collections was less advance booking of vehicles and less import of vehicles etc; in case of energy sector, the shortfall was due to clearance of backlog of refunds etc.
The sectors which have shown positive growth in federal excise collection during the period under reference (July-March), as compared to the same period last year included cigarettes (15 percent), cement (19 percent), natural gas (11 percent), POL (31 percent), beverages (24 percent) etc.
On payment of refunds, the conference was informed that the total number of claims on July 1, 2006 was 26,990 in which an amount of Rs 25.8 billion was involved. In addition to this, a total number of 18,688 refund claims were received up to March 31, 2007, involving an amount of Rs 12.9 billion.
Out of the total refund claims, Collectorates have disposed of 30,787 claims involving an amount of Rs 30.2 billion thus leaving the balance of 9,366 claims in which an amount of Rs 7.5 billion was involved, Wajid Ali added.
While reviewing the implementation of reforms initiatives, CBR chairman directed the Information Management System (IMS) Wing of CBR and Pakistan Revenue Automation Limited (Pral) to overcome the shortages of technical equipment and staff for smooth and efficient working of the Collectorates. He was of the opinion that fully automated system should not have any human intervention.
Pral Project Director, Imtiaz Ahmed Khan, assured CBR that upgradation of the system in his organisation was currently in progress and after few weeks it would enable CBR to interact with the taxpayers electronically.
Sources said that the CBR has decided to update the existing sales tax computer software through an Integrated Sales Tax Management System (ISTM) to plug the loopholes. The entire sales tax computer system would be revamped with the help of ISTMS brining improvement in the existing system. The system would help in proper management and monitoring of the sales tax regime.
Proposals for the National Budget 2007-08, progress regarding preparation for RTOs roll out, performance of special committees constituted after the last conference and progress on implementation of decisions taken in the last conference also came under review.
Among senior tax officials Member (Audit) Abdul Razzaq and Member (FR&S) Dr Athar Maqsood of CBR were also present.
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