The Federal Board of Revenue (FBR) will provide legal backing to the 'White List of Taxpayers' scheme through the Finance Bill (2009-2010) for its implementation from next fiscal. It has been learnt here on Thursday that the FBR has finalised arrangements for issuance of the 'White List of Taxpayers' to facilitate compliant taxpayers.
The legal backing for the scheme would be obtained in the coming budget. However, there is a possibility that the FBR might implement the scheme in phase-wise manner in second or third quarters of 2009-2010. Sources said the concept of the 'White List of Taxpayers' had not been dropped, and the scheme would be gradually implemented after public awareness. Once the concept had been fully publicised, the scheme would be systematically implemented in next fiscal, they added.
According to the sources, the board would initially include sales tax and corporate income tax return filers in the list to implement the scheme from next fiscal. The FBR has chalked out a mechanism for initial implementation of the scheme so that the taxpayers can easily adopt it.
In the first phase, the FBR may only include sales tax filers and corporate income tax filers as part of the 'White List of Taxpayers', which would be subjected to removal. Anyone who would be placed on the 'Black List of Taxpayers' would be removed from the 'White List of Taxpayers'
There is a possibility that the FBR might not remove e-filing taxpayers from the 'White List of Taxpayers' due to quality of data. As the e-filing population would increase, the programme would be systematically expanded. In the first phase, an automated link between the 'White List of Taxpayers' and the Customs and Sales Tax systems will be required. The list can prevent the operational systems from accepting transactions from taxpayers, who are not on the 'White List'.
The 'White List of Taxpayers' will become an integrated part of the operational systems-not an informational check only. The decision to manually override the 'White List' must be checked by the audit system to be reviewed by a group of tax officials.
Sources said the FBR would consult taxpayers and their representatives such as business organisations, trade bodies etc for proper use and implementation of the 'White List of Taxpayers' by the FBR. The board would also take the input of business community to assess the list, keeping in view their business needs.