Senate body stresses need for purge in Sales Tax department

07 Aug, 2004

The Senate Standing Committee has stressed the need for downsizing in the Sales Tax Department, retaining honest and qualified staff at lucrative remuneration.
Committee chairman Senator Ahmed Ali, in his remarks after visiting the Sales Tax House, said the sales tax had passed through a worst type of crisis linked with wide ranging corruption, but things had quite changed with the advent of 2004 which witnessed a lot of automaton in the sales tax system.
He said the committee witnessed a distinct change in the mindset of the tax officers, who were better educated and talked about morale.
The change was also the result of massive automation of the systems, he observed.
Expressing wonder, he questioned why the centralised computer network, known as Starr in the Central Board of Revenue (CBR), had been established in Lahore, ignoring Karachi, which was the largest taxpayer city of the country.
Senator Ahmed Ali expressed the hope that with continuous dialogues between the officials and public representatives, problems could be overcome, adding: "Our main objective should be to save the taxpayers from hassle of taxation system."
Talking about rooting out corruption from the taxation system, he said both the tax officers and businessmen were equally responsible for the corruption. It was wrong to assume that the computer could detect frauds unless there was a will and culture of honesty inculcated among the officers and the taxpayers, he added.
The Senate Standing Committee Chairman urged the tax administration to reduce the cost of collecting revenue through downsizing, adding that was better than levying new tax on the public to meet the expenditures.
He did not agree with the assertion, made by CBR member, Sales Tax, Shahid Ahmed, that a risk-based management system would check any tax frauds.
He said that there was no guarantee that the taxpayers, placed in Green category, would not be involved in the corruption.
Senator Ahmed Ali lauded the CBR decision to waive ginned cotton from the sales tax, and said that the step would go a long way in checking attempts to evade the tax by the ginners, who registered only 60 bales out of a stock of 100 to save the sale tax.
It would also help determine the exact production of the cotton in the country, he said.
He questioned the efficacy of collecting sales tax when out of a total of Rs 41 billion collections, Rs 35 billion were refunded.
He called for making other sectors as zero-rated sales tax to eliminate chances of corruption and tax evasion.
Earlier, Sales Tax (Enforcement) Collector Khwaja Tanveer Ahmed made an eloquent presentation to the Senate Committee on the changes and progress made by the Sales Tax Department.
He said as a result of taxpayer-friendly policies, there had been over 16 percent growth in revenue, generated through sales tax during 2003-04.
The department paid Rs 26,340 million refunds during the year under review as compared to Rs 20,380 million paid in the previous year, marking 30 percent increase.
Elaborating on future plans of the department, he said the processing of refund claims would be on selective basis against processing of the entire claims done in the past.
Senate Standing Committee members included Professor Khurshid Ahmed, Asif Jatoi, Muhammad Akram and Dr Safdar Ali Abbasi.

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