The Federal Board of Revenue (FBR) has serious flaws in the indigenously developed Tax Management System (TMS) which is unable to process income tax data accurately or perform any of the key functions at the reformed units.
Sources told Business Recorder on Friday that the TMS had been basically designed to process all income tax related functions through automation and integration of data electronically among the regional departments. However, a ''study report on automation'' compiled by TMS development team detected serious implementation problems in the system.
It pointed out that the FBR had not given any importance to the TMS despite the fact that it was a major automation system. One of the major flaws in the system is the availability of inaccurate and invalid data of taxpayers, creating complications in the TMS. This is due to obsolete data on income tax return forms, registration, tax and payment and other related data.
The FBR had declared the TMS as a temporary arrangement of integration till full-fledged functioning of a modern integrated system under reforms. Under reforms, the board wanted to purchase some components of highly sophisticated Integrated Tax Management System (ITMS) from foreign firms, whereas a few components would be developed in-house with the help of local experts. The question arises whether the local experts would be able to develop an internationally recognised system to integrate all taxes ? sources stated.
The report said that the TMS is not fully functional due to absence of an implementation strategy document and there is no implementation team to carryout the task. The TMS, though declared the official software, was never given any consideration in any policy decision.
The issues of designing, re-designing of software, infrastructure development communication, hardware and other components of TMS were not functioning properly. The FBR has placed entire blame of faults on the TMS development team instead of realising that the problem was in the implementation stage.
During the last seven years, the system was constantly re-developed after changes in tax laws, introduction of self-assessment and new functional systems under the reform process. The TMS is simultaneously providing support to both old and new versions of the income tax laws.
But the report highlighted that non-implementation of TMS was primarily due to the insufficient hardware at the Regional Tax Offices (RTOs). The TMS has neither central server at the headquarters nor it has any communication network countrywide. The TMS is unable to create linkages with other FBR computer software like NEXUS (broadening of tax-base); web-portal (e-filing system) and other systems.
Sources said that untrained key punch operators had also contributed in wrong data entry for the TMS. The users of the system seemed to be reluctant to operate due to the apprehension of taking away discretionary powers under Income Tax Ordinance 2001.
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