The World Bank review mission has observed that the introduction of the taxpayer ledger system is a key component of the reformed general sales tax (RGST) as it will document financial transactions of the registered persons after implementation of RGST.
According to the latest WB review mission report on Tax Administration Reform Project (TARP), the taxpayer ledger system is the most important component of the RGST initiative of the Federal Board of Revenue. The WB review mission has identified that there is a need to have a general ledger for each taxpayer. This ledger would be constructed using data on taxpayer, tax type, tax period access and would enter every financial transaction associated with the taxpayer, tax type for that period.
The WB said that the current implementation of the RGST would remain in progress with only sales tax information being available with the system. The difficulties with the accuracy of the income tax payment information being provided through the bank (ie a very large number of misidentified taxpayers) are reportedly preventing the importation of the payment information into the system.
Though the quality of data is important this unidentified payment data is already being used by the existing systems exposing it in one place would allow FBR staff to take the necessary' corrective action when misallocations are observed or reported by taxpayers.
This system was to be expanded to all other taxes once operational in Sales Tax. It will benefit the collection functions by providing them with one place to obtain all the current indebtedness of a taxpayer to FBR along with allowing the refund system to determine that there is no outstanding amount payable by the taxpayer in any other tax period for any taxes. This system is used primarily by enforcement and accounting - it is suggested that the business owner be the FBR Enforcement Wing.
The WB has recommended the FBR to proceed with the Task Force's recommendations to establish a Core Business Domain Team (CBDT) which should include a customs specialist along with a participant from PRAL, housing it within the SP&S Wing. The WB has further recommended the FBR to confirm readiness of taxpayers to convert to the full 8 digit National Tax Number (NTN) by 2011-January deadline.
The FBR should also enforce the requirement for new taxpayers to use the full 8 digit NTN now. Ensure enforcement procedures are in-place and actively being used to ensure new taxpayers are using the full 8 digit NTN in their business transactions. The FBR should also introduce the taxpayer ledger application into the integrated tax management system (ITMS) offering. The Enforcement Wing is recommended to be the business owner of this application, the WB added.