Major tax reforms implemented in FBR

The government has implemented major tax reforms in the Federal Board of Revenue (FBR), including separation of tax policy from tax administration, engagement of leading data scientists, access to third party data to have information on potential high net worth individuals and third party audit of Pakistan Revenue Automation Limited (PRAL).
Sources told Business Recorder here on Wednesday that key policy measures have already been undertaken or are in the pipeline to bring reforms in the tax administration in the next two months.
The first most important measure taken by the PTI government is to separate tax policy from tax administration which had been pending for the last 15 years. The federal cabinet has approved to separate tax policy from revenue administration and constituted a committee to work out legal and technical modalities to this effect.
The government has decided to formulate Tax Policy Board (TPB) as per the longstanding demand of the business community.
A full-fledged organisation development programme has been launched for FBR with the help of World Bank, Department for International Development (DFID), McKinsey and Her Majesty's Revenue and Customs (HMRC).
Another major development at the FBR is the third party audit of Pakistan Revenue Automation Limited (PRAL), which has been undertaken. Under the reforms, the IT arm of the FBR i.e. PRAL would be made autonomous with an independent board.
Under the major reforms, the FBR will sign formal access protocols with third party database providers for FBR to access information on potential high net worth taxpayers.
Sources said that the FBR has already initiated a dialogue with provincial departments to create online linkages with provincial land records, registration authorities, utilities data, properties' data, vehicles registration information, FIA/immigration data, NADRA and other government databases to have online access to financial transactions. The authentic third party information would ensure flow of information of financial transactions to book high net worth individuals.
Sources said that the leading data scientists have been engaged from Harvard, LSE and Oxford to develop algorithms and analyse data.
A new board has been formulated and notified to run FBR which includes professionals.
Sources added that the ongoing reforms in tax administration have been replicated in export promotion/ease of doing business for investors and businessmen. Reforms in taxes would also be replicated in agriculture and financial sector including housing finance, tourism, software exports and e-governance.