The Federal Board of Revenue has fixed performance rating benchmarks for the Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) to check enforcement and compliance of the registered units during 2011-12. Sources told Business Recorder here on Friday that the end result of effective enforcement is to reduce the non-compliance ratio to the acceptable levels so that Tax Gap is narrowed.
Accordingly, the following performance rating benchmarks in terms of non-compliance ratio is laid down to be achieved by June 30, 2012 for the Financial Year 2011-2012 (Tax Year 2011): Less than 1 percent non-filers/short filers in LTUs; less than 7 percent medium size non-filers in RTOs and less than 20 percent small size non-filers in RTOs.
According to the enforcement plan (2011-2012), the number of non-filers and short-filers should be less than one percent in the LTUs whereas the number of small size non-filers in the RTOs should be less than 20 percent. The enforcement plan (2011-12) has been dispatched to the field formations for compliance.
The enforcement plans for direct and indirect taxes in the past had also issued similar performance rating benchmarks for the LTUs/RTOs. The same benchmarks have been set for the fiscal 2011-12. As per previous enforcement plan (2010-11) of the FBR, under the benchmark fixed for the Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs), there should be less than one percent non-filers/short filers in LTUs; less than 7 percent medium size non-filers in RTOs and less than 20 percent small business entities non-filers in RTOs.
In order to achieve these targets, the FBR had launched the enforcement plans for direct and indirect taxes in 2010-11 to lay down systematic enforcement procedures and to evaluate their effectiveness through monthly reporting system. Sources added that the effective enforcement activities are aimed at reducing the non-compliance ratio to the acceptable level so that tax gap is narrowed down.
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