The establishment of Integrated Tax Management System (ITMS) and a national data warehouse, would be launched in December 2008 and completely rolled out at the reformed units by the end of December 2009.
Sources told Business Recorder on Saturday that the Federal Board of Revenue would submit a detailed Information Technology policy and ITMS plan to the World Bank for approval. The one-year period ie December 2008-2009 would be used to remove deficiencies in the proposed system after testing the ITMS and data warehouse at one Large Taxpayer Unit.
However, the board has decided to minimise the role of Pakistan Revenue Automation Limited (PRAL) in devising IT strategy in view of its limited capacity. Interestingly, the PRAL wanted funding from the WB grant for procurement of hardware required for e-filing project. The procurement of ITMS would help in computerised exchanging of information pertaining to all the federal taxes from national database unit.
The Pakistan Customs Computerised System would also be linked with ITMS, as the system has up-dated data on World Customs Organisation (WCO) Models, international standards and best global practices on the customs clearance procedures.
Under the new strategy, the FBR would explore possibility of purchasing a developed system in view of The FBR has adopted a mixed approach in procurement of the ITMS. A few components would be developed in-house while some internationally recognised systems would be purchased from countries where these are operating successfully.
When the WB mid-term review mission had completed its meetings with the board, the ITMS was an area of grave concern to the banks' project team as timelines for procurement/bidding were slipped consistently in the past. Notwithstanding the fact that there have been some procurement related challenges in finalising the two stage bidding document, the main cause of delay remained lack of organisational capacity, especially in the area of IT procurement, overall program management and commitment at the board's level.
In view of these WB observations, the FBR has recently convened a special board-in-council meeting on the IT policy and ITMS plan. The new IT policy and ITMS pan has been approved by the board-in-council.
Sources said that the Bank midterm team had detailed discussions with the concerned FBR members on the cost estimates for the ITMS and it was agreed that around 12US$ million (including hardware and development/licensing costs) need to be earmarked for ITMS deployment.
The WB has recommended that the FBR needs to ensure that not only the new agreed timelines for the ITMS bidding process are adhered to, but every effort is made to expedite the process and that the contract is signed with the selected vendor must before the agreed date.
The overall responsibility of closely monitoring the ITMS bidding process should remain with the FBR Member Tax Policy and Reforms. The Information Management Services (IMS) Wing and line members including Direct taxes and Sales Tax should also be involved to make ensure that the process is completed at the earliest.
Moreover, the FBR needs to involve members of BPR team (direct taxes as well as sales tax) in the evaluation process, particularly a the first stage, so that they can help fine tune the requirements for the second stage for bidding of ITMS. The mission recommends that the agreed dates for the implementation of ITMS be strictly followed, the WB midterm review mission had added.
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