FBR to upgrade IT infrastructure through World Bank lending

Updated 03 Jun, 2024

ISLAMABAD: The Federal Board of Revenue (FBR) will modernise its IT infrastructure, set up new data centres and implement an automated income tax refund system with the help of US$ 25 million loan to be provided by the World Bank (WB).

The FBR has submitted a report titled ‘Findings and Recommendations of Committee for effective enforcement of Section 170A’ before the Islamabad High Court in a public interest petition moved by Khurram Shahzad Butt against FBR and its field formations for their negligence and long silence to implement law enacted by Parliament to issue refunds without personal involvement of FBR officers.

The petitioner Khurram Shahzad Butt informed that Member (Policy) FBR personally appeared before IHC and stated that recommendations for effective enforcement of Section 170A of the Income Tax Ordinance 2001 will be implemented in accordance with the US$ 25 million loan expected to be provided by the WB.

Digitalization of tax system: FBR cuts deal with Karandaaz

The report said that the FBR is currently under a WB project involving the modernisation of its IT infrastructure and setting up of new data centres to help simplify and streamline all associated service delivery aspects. This process also includes issuance of income tax refunds. Therefore, through the use of IT technology, refunds can be processed more quickly and efficiently.

The report submitted before IHC by FBR reveals that FBR’s e-portal has no direct electronic linkage with AGPR, which monthly deducts income tax on gross salary of government employees. FBR’s e-portal is also not integrated with government’s withholding agents, reflecting serious issues in verification of tax deducted at source, meaning thereby that there is an inadequacy of taxpayers’ verification of tax deducted at source by various withholding agents.

This is perhaps the most glaring impediment in the way of enforcement of automated tax refunds process. Tax deducted by other withholding agents such as Power Distribution Companies (Discos), Excise & Taxation departments, educational institutes, travel agents, airlines, SNGPL, SSGCL, telephone/ internet service providers, semi-autonomous government entities, government departments etc is not visible in the FBR’s database.

IHC order stated: “FBR has submitted a report titled ‘Findings and Recommendations of Committee for Effective Enforcement of Section 170A’. The report and recommendations appear fairly comprehensive, and the Member (Policy) has stated that these recommendations will be implemented in accordance with the US$ 25 million loan expected to be provided by the World Bank.

Objective of this petition seems to have been achieved. The petition is accordingly disposed of, leaving it open for the petitioner to approach the Court again if the recommendations are not implemented despite the World Bank’s loan conditionalities being met by the government,“ IHC order added.

Copyright Business Recorder, 2024

Read Comments