USAS causes revenue loss to exchequer: survey

Over 56 percent of the tax employees have informed the Federal Board of Revenue (FBR) that introduction of Universal Self Assessment Scheme (USAS) has caused revenue loss to the national exchequer. The Federal Board of Revenue (FBR) on Monday released the results of the perception survey carried out by a private company.
According to survey, over 50 percent of the business community including trade bodies and large taxpayers declared that corruption in the tax machinery has been slightly reduced due to reform process.
The survey on USAS pointed that since the stakes are high on both sides, the possibility of biased response from both types of respondents cannot be ruled out altogether. Thus, as expected only 5-22 percent tax officials believed that the taxpayers have complied with obligations to the best of their abilities, more than 50 percent of them indicated that taxpayers have performed their responsibilities only to some extent.
In fact, 37-43 percent of tax employees contended that taxpayers have not performed their responsibilities at all. Contrary to this only up to 10 percent of trade representatives and intermediaries believed that the taxpayers have not performed their duties.
Regarding revenue loss due to USAS, 56-67 percent of tax employees thought that the introduction of USAS has caused revenue loss, whereas only 8-22 percent taxpayers and intermediaries shared this perception.
One of the important findings of the survey has been that up to 65 percent of the respondents including tax officials, trade body representatives, and intermediaries believed that a large number of persons earning taxable incomes are not registered with FBR.
Up to 79 percent of tax officials and 71 percent of other respondents believed that the overall objective of issuance of refunds has been met only partially. Nearly 35-40 percent tax officials and 34-43 percent of other respondents agreed that effective check on bogus refund claims is still not properly in place.
The survey results confirmed that the corruption and related governance-related issues have always tainted the overall position of the organisation. It was believed that through the establishment of dedicated field offices the extent of this menace will be reduced greatly.
The responses in this regard are interesting as 31-53 percent of tax employees believed that there is a high level of reduction in corrupt practices. On the other hand, 50-73 percent of other respondents (including trade bodies, large taxpayers and intermediaries) perceived that although some improvement in this area is there but a reduction in corruption in only moderate, survey added.
Ironically, 49-68 percent respondents indicated that they had no idea that tax policy reforms have also focused on simplification of laws, rules and procedures. This outcome needs immediate attention of the Facilitation and Taxpayer Education (Fate) wing within FBR.