The State Bank of Pakistan (SBP), Accountant General of Pakistan (AGPR), along with the Project to Improve Financial Reporting and Auditing (Pifra), are all out for the initiation of new electronic value-added tax (VAT) refund payment system-2010 and E- payment of taxes directly from taxpayers' bank account.
A meeting on "E-payment-VAT" early implementation was recently convened by the Federal Board of Revenue (FBR), which was chaired by FBR Chairman Sohail Ahmed. Senior officials from the Ministry of Finance, SBP, AGPR, Pifra, Auditor General of Pakistan (AG) and Controller General of Accounts (CGA) also participated.
Sources told Business Recorder on Friday that the standing operating procedure (SOP) for implementation of electronic refund payment system under new VAT law 2010 and E-payments would be jointly chalked out, taking on board all the revenue collection and reconciliation government agencies.
According to sources, the FBR has convened the meeting to share E-payment and electronic refund payment system under new VAT law-2010 with relevant revenue collection and reconciliation agencies. The meeting is part of the FBR strategy to develop more interaction among all government departments for implementation of any new scheme.
The FBR officials gave detailed briefing on the E-payment system, which would also be used for electronic deposit of refunds directly with the taxpayer's bank account under the new VAT system to be implemented from 2010. The E-payment system would enable the registered taxpayers to deposit tax from any bank account and also receive refunds directly into their accounts.
The representatives of the revenue collection/reconciliation agencies highly appreciated the FBR's E-payment system, and offered their full support for implementation of the new VAT law 2010. At present, the taxpayers, having accounts in the National Bank of Pakistan (NBP), were allowed for electronic payment of taxes through direct debit system. In the next phase, the direct debit facility would also be available to other commercial banks for online transfer of funds for making tax payments.
As a part of VAT implementation strategy, the E-payment system would be updated as per requirements for speedy payment of refunds. It was explained that the new VAT law 2010 would collect tax at each stage of supply. At the same time, it would also ensure speedy payment of refunds for which "Expeditious Refund Project" has already been successfully tested at the LTU, Islamabad. Without prompt payment of refund, the new VAT law 2010 would be useless.
Following replication of the new sales tax automated refund system at other reformed units, the electronic payment of refunds would be made on risk-based profiling of registered persons without 100 percent verification of documents. On the conclusion of the meeting, a high level committee, comprising officials of the Finance Ministry, SBP, AGPR, AG, CGA and Pifra, was constituted to obtain feedback of all the stakeholders on E-payment system on regular basis.