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The abolition of Broadening of Tax Base (BTB) Zones by Federal Board of Revenue (FBR) has raised the question if the FBR's field formations and operational wings are now capable enough to expand the tax base during the current fiscal year.
Tax experts told Business Recorder here on Thursday that FBR's BTB zones were established with the approval of the Board-in-Council. The withdrawal of the decision may require approval of the same or any other competent forum.
They said the fate of the data collected by the BTB zones hangs in balance, as it is not clear yet which department of FBR will be its custodian.
On the other hand, a source said that the measure has been taken to improve efficiency of the department and FBR has assigned the task to all field formations including Large Taxpayers Units (LTUs), Regional Taxpayer Offices (RTOs) and other relevant field offices to broaden the tax base instead of solely depending on BTB zones for this exercise.
Tax experts said that the FBR's field formations are already facing pressure to meet the assigned revenue collection targets for 2019-20. Whether the field offices including RTOs have the capacity to broaden the tax base as well as achieve the assigned revenue collection targets, asked the tax experts.
Secondly, the BTB undertook important task by undertaking plaza mapping in important metropolitans, collected data from key housing societies and built up hundreds of thousands of potential cases where information was collected in such shape that could be converted into taxability.
In the past, tax authorities have appreciated the work done by the BTB Wing and had stated that the amnesty scheme announced in May/June 2018 got success due to work of the BTB.
At the same time, the number of return filers increased from 1.6 million to 2.5 million so the BTB helped create an environment where non- filers were forced to come into tax system.
Now the question arises how the crucial information collected by the BTB Zones will be fully utilized for the purpose of broadening of tax base.
They said that the FBR took decision to establish BTB authority through an act of the Parliament in 2017 after experiencing that the task of broadening could not be done by operational and policy wings of Inland Revenue Service (IRS).
Earlier, the FBR wanted to expand scope and coverage of BTB zones in phase-wise manner. The BTB Zones were assigned Benami task and this mechanism of broadening was abolished in totality.
Tax experts also raised a question about the ownership of the data gathered by BTB zones about potential non-filers. There is need to place a system to manage and utilize this data to expand the tax base.

Copyright Business Recorder, 2019

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