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The All Pakistan Tax Bar Association (APTBA) has termed the newly introduced e-filing system of income tax returns as faulty, and counted 18 main reasons for its immediate suspension.
Talking to Business Recorder, Naveed Andrabi, President of APTBA, on Sunday said that the new system of computerised filing of income tax returns and documents by the corporate clients has in-built defects. He said that the FBR was slow in considering the difficulties being faced by the taxpayers and was insisting switching over to e-filing without looking into its consequences.
HE ENUMERATED THE FOLLOWING DEFECTS:
1. In the old system it was through Nift (a company with Govt-private partnership), digital signatures were required to be obtained by each client at a cost of Rs 5000 per signature. The registration web site (nift.com.pk) was responsive. The new system does not response to queries.
2. FBR has now discontinued the use of digital signature, issued by Nift and has introduced its own web portal and has asked all corporate clients, other than those registered with Karachi LTU, to register with it for obtaining signatures and tax returns filing needs. The new web portal is not fully functional yet.
3. FBR has made e-filing mandatory for corporate clients, whereas it is optional for others.
4. It was through Nift that digital signatures were required to be obtained on payment of Rs 5000 per signature. In the new system, the fee has been revised down from Rs 5000 to Rs 1000, and annual renewal fee Rs 500 per signature. However, those who had registered last year are neither paid back the difference in registration fees nor have been granted exemption from renewal fees to adjust the difference in earlier charges.
5. The government has discontinued the use of digital signature issued by Nift and introduced its own web portal and requested all corporate clients to get registered in the new system. This web portal is not fully functional and, at this moment, registration on this web portal is not possible, for technical reasons. In this situation, filing of returns has become a frustrating experience.
6. The new system has made the process of registration very cumbersome. It takes days to get registered. The requirements for registration are i) name of the company, ii) its registration number, iii) NTN of the company, and iv) NTN/NIC of the director(s) of the company, which have been linked with the name of the company. As a result it is not known with whom a consultant has been linked and with whom he has to deal.
7. PRAL (Pakistan Revenue Automated Ltd) is the originator of this new web site. PRAL is not fully responsive to calls from tax consultants and corporate clients. Redressal of problems, being faced by the taxpayers, is not taking place in time.
8. Help line, through which a consultant tries to reach PRAL, has not been activated to its full capacity. No one is there to give proper answer. The procedure is annoying. Though the procedure of e-filing of tax returns, registration of clients/consultants etc has been made obligatory, there is no proper support, and the system is yet to be made fully functional.
9. Consultants have also to get registered with the FBR web site. The rules for consultants' registration with FBR web site, that is e.cbr.gov.pk are there but there is no link available on the FBR web site cbr.gov.pk from where a consultant can get registered as e-intermediary.
10. The prerequisites of registration include, among other information, name/NTN/NIC/e-mail address of consultant's client. Names of directors are usually changing and, therefore, it is not always possible to supply this information or to keep track in the change of director(s) in a company. At the same time, one does not know with which director FBR is linking up, or desires a consultant to link up.
11. Under the new system, FBR will visit the client on the e-mail address and seek his approval whether the mentioned consultant was acceptable to him. If confirmed, the FBR web site allows the consultant to work on his (client) behalf. Why the FBR is trying to become a link between the client and the consultant is another question that needs to be answered.
12. The e-filing system will not work on an ordinary dialup Internet. For this, one needs minimum 128 KBSL linkup, which is not available to all the people in Pakistan. It is very expensive. Rs 1200 per month is the fees. This facility is available only in big cities. What would happen to those who are in small towns but fall under the category of corporate client or large taxpayer unit?
13. FBR has introduced two systems for large tax payer units: one system is exclusively for Karachi, and the other for the rest of the country. "Why do we have two different systems simultaneously?"
14. The LTU web site, Karachi, still requires consultant/client to have digital signature from NIFT, whereas FBR has declared it redundant. It is an anomaly in the system. So far the consultants do not have any explanation for this duality.
15. Two web sites, one for LTU in Karachi and the other for all LTU cannot go on e-portal sites.
16. New return forms have been introduced only a few days ago. Basic purpose of new forms, as explained by the FBR, is that data should go in FBR archives. But, in the process, the FBR has ruined the system that was developed after great effort. What has been done in new forms is that the font size has been reduced and columns have been squeezed to accommodate needed information in one page. The only difference is that it is now difficult to read and fill in the columns. These forms, APTBA thinks, will further complicate matters pertaining to income tax-related information.
17. These forms have been introduced without taking all stakeholders on board. A consultant from Chile, Hugo Hanich, has designed these forms. This consultant had no experience of working with Pakistan's income tax practitioners.
18. E-filing by a corporate client or his consultant is possible only from big cities, where Internet facilities are available. Those who do not know how to use computers are likely to feel left behind in the technical race and face its consequences. Andrabi said that FBR did not take all stakeholders on board before introducing e-filing, partially discarding Nift, and introducing PRAL before coming up with highly sophisticated and technical solution for the documentation of tax system in the country.
He said that the APTBA was not against new systems, but these should be introduced only after making it user-friendly. He said that the new system should be held in abeyance till such time as it is made fully functional, and competent staff is posted at help lines to listen to the problems of the taxpayers--and solve them.

Copyright Business Recorder, 2007

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