The Federal Board of Revenue (FBR), the State Bank of Pakistan (SBP), and the commercial banks have successfully tested the 'Electronic Payment and Refund System' (EPARS), enabling the taxpayers to directly deposit tax payments from their bank accounts into the government treasury.
Sources told Business Recorder here on Sunday that the commercial banks, the SBP and the FBR successfully completed the 'Users Acceptance Test' to check the authenticity of the new system for electronic payments of the taxpayers directly into the government treasury. It is a major breakthrough in tax payment system where tax money is directly transmitted into the government treasury without involving manual processes. All stakeholders are satisfied with the live testing of the network system, which would virtually end the manual interaction between the taxpayers and the FBR for tax payments purposes.
The testing of the system was done recently by the FBR, commercial banks and the SBP under the "Users Acceptance Test". After error-free testing of electronic tax payments, it would be implemented in selected commercial banks, in the first phase.
Under the phase-wise plan to implement the scheme, the FBR has proposed amendments in the Treasury Rules, and forwarded the same to the Ministry of Finance for issuance of the revised rules. Secondly, an agreement between the FBR and the commercial banks would be inked in due course of time for implementation of the EPRAS. By March 2011, refunds would also be electronically deposited directly into the bank account of the refund claimant.
Sources said that the live testing of the EPRAS was done by stakeholders including the FBR, SBP and the commercial banks. The live testing showed that the FBR was connected with the Tax Clearing House (TCH). The TCH has been interlinked FBR with commercial banks and SBP to exchange data for electronic payment of taxes. At the same time, the TCH was also interlinked with the concerned commercial bank where the taxpayer maintained the account for tax payment. The live testing showed that the account of the taxpayer was successfully debited and funds were transferred to the SBP under the EPRAS. Ultimately, the SBP issued the computerised payment receipt (CPR) to the FBR for onward transmission to the taxpayer under the life testing network.
The technical committee on EPARS has also approved a new procedure for clearance of e-Refund transactions. According to the procedure, the FBR will issue electronic debit advice for each commercial bank to the SBP for transferring the funds from government account to the Commercial Bank's account. The SBP will transfer the funds to commercial banks and send an electronic debit confirmation message (EDC) to FBR by mentioning the reference information for each commercial bank. The FBR will issue an electronic refund advice (ERA) along the taxpayer wise detailed electronic credit advices (ECAs) to the Commercial Bank (via EPARS).
The commercial bank will credit individual taxpayer's account according to ECAs provided by FBR within two working days from receipt of ERA. The commercial bank will send refund confirmation message (RCM) to FBR (via EPARS), in case of successful credit to the taxpayer's account. The amount, which would not be credited to the taxpayer's account would be transferred to SBP for crediting to Government of Pakistan account.
For each Refund Failure Message (RFM), Commercial Bank will pass on the reference number and send to FBR as well as SBP (via EPARS). The Refund Failure Message (EFM) received from commercial bank will be confirmed by SBP and sent to FBR. The SBP will print the scroll of Refunds through EPARS which will provide commercial bank-wise entries. If due to any unavoidable circumstance like system failure, etc, SBP is not in a position to issue the CPRs, the amount available in the Clearing A/C will be credited to "GoP Central Accounts-1" as per current practice.
After finalisation of refund process, the technical committee gave go-ahead for development of e-Refund component of EPRAS. The commercial bank means "Commercial Bank Headquarters" or "Commercial Bank Treasury", procedure for clearance of e-Refund transactions added.
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