The Federal Board of Revenue (FBR) has fixed a timeframe for implementation of key reform/policy measures including withdrawal of exemption statutory regulatory orders (SROs) by end-February 2016 and establish centralised electronic database between federation and provinces to record immovable property transactions for levying real estate taxes on actual market values (January 2016).
Sources told Business Recorder Wednesday that the FBR is framing a comprehensive document for the Finance Division to update it on the timeframe for implementation of key reforms and policy measures. Firstly, to bridge the projected fiscal gap and generate federal tax revenue, the FBR will take additional revenue measures amounting to Rs 40 billion.
Secondly, the process on consultation on SRO removal/withdrawal (phase-III), yielding 0.3 percent of Gross Domestic Product (GDP) on a full-year basis, shall be initiated in December 2015, to be concluded by end-January 2016. The FBR will enact this measure (withdrawal of exemption SROs) by end-February 2016.
Thirdly, in January 2016, the FBR will start working closely with provincial governments to establish a centralised electronic fiscal cadastre to improve record transactions and assess real estate tax for each property based on periodically updated market valuation. Fourthly, the FBR will put in place a comprehensive monitoring system with quantitative performance criteria, such as the number of risk-based audits, as well as qualitative audit indicators by end December 2015.
Fifthly, the FBR by end January 2016, will submit to the National Assembly draft legislation against "Benami" transactions, in which assets are held by or transferred to a person, but have been provided for, or paid by, another person. Sixthly, with the introduction of an automated system of pre-verification in addition to post-verification, the FBR has accelerated processing and payment of sales tax refunds claims. The FBR's aim is to bring the stock of sales tax refund claims to a level consistent with no more than a three-month flow of claims (estimated at Rs 20 billion).
Seventh, the FBR will further strengthen the integrity management unit by identifying potential processes within the FBR that could strengthen its anti-corruption structures, including in the directorate General of Internal Audit, by end-November 2015. In addition following the ratification of the whistleblower law for tax crimes, FBR will establish communication platforms (phone hotline and website) to facilitate public reporting of corrupt practices in tax administration, the aggregate results of which we will publish on a quarterly basis, starting in April 2016. Implementation of the new tariff structure that will reduce the customs tariff slabs from five to four will be completed by July 2016, the FBR added.