The World Bank (WB) review mission has conveyed to the Federal Board of Revenue (FBR) that FBR Members' Domestic Operations should determine the cause of the low performance in recovery of arrears during the last four months and take corrective measures to avert such happenings in 2010-11.
The WB action plan on Tax Administration Reforms Project (TARP) has made some recommendations for enforcement of arrears recovery drive to boost current collection. The FBR Members Operations should determine the cause of low performance in enforcement of arrears recovery in the last four months and take appropriate corrective actions. Some of the other WB recommendations to improve enforcement at the level of the field formations include initiation of a project to automate enforcement by implementing taxpayer's ledger, collection tracking system and automated notice issuance system.
The WB further recommended use of automatic (IT) systems to support enforcement and audit in the field formations. In the immediate term, the FBR should send warning notices, automatically issued by the computer, to non-compliant taxpayers. The Board should also send computer-generated warnings to taxpayers with inconsistencies (XMS) asking them to file amended return or to consult their field formation to solve these inconsistencies.
For the automated notices to non-filers of returns, the WB has recommended that the FBR should prioritise the 1.2 million cases according to the ten revenue potential categories developed by tax authorities. The information pertaining to major categorised revenue generation cases should be sent to field formations with monthly targets for delivery. The FBR Members Domestic Operations North and South should follow up the program execution pertaining to automated notices to non-filers.
In the area of stop-filing, the FBR would identify inactive taxpayers covered within the jurisdiction of Large Taxpayer Units. The LTUs would be required to bring their stop filing rate to less than one percent. The Regional Tax Offices would be required to identify inactive taxpayers. The RTOs would be required to bring down their medium size taxpayer non-filing rate close to 7 percent and for small taxpayers below 20 percent.
The WB review mission has further recommended to the FBR to initiate a project to automate enforcement by implementing taxpayer ledger, collections tracking system, automated notice issuance, automated follow-up, sources added.
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