The Federal Board of Revenue (FBR) has said that any new individual intends to file income tax return, is not required to fulfil process of registration, as he will pay return straight away alongwith the copy of computerised national identity card (CNIC). This was stated by the tax authorities while briefing the 42nd meeting of Senate Standing Committee on Finance, Revenue, Economic Affairs, Statistics and Privatisation held at Parliament House.
Chairman FBR briefed the Committee that the recommendation regarding replacement of NTN with CNIC for individuals had been implemented and as per new process, the CNIC number for individual taxpayers would be their national tax number. On a query raised by the Committee, the Chairman FBR replied that any new individual intend to file returns, had no need to fulfil the process of registration, he will pay return straight away alongwith the copy of CNIC. The Committee was of the view that the recommendations of the Committee were not being implemented in its true letter and spirit and the returns were still being filed through old mechanism. Chairman FBR briefed the Committee on the implementation status of the recommendations made by the Committee related to FBR from May, 2015 to March, 2016. Out of 24 demands made by the Government of Khyber Pakhtunkhwa, he informed the Committee that Customs will provide IT Platform to Khyber Pakhtunkhwa Revenue Authority for collection of Infrastructure Development Cess through banks in the territorial jurisdiction of the province.
The Committee was of the view that the matter should be discussed by the Senate Special Committee on 24 demands made by the Government of Khyber Pakhtunkhwa. Chairman FBR informed the Committee that the powdered milk being covered by the description "concentrated milk" was thus subject to 10% sales tax if sold under a brand in retail packing and no discrimination could be made in this regard. He said that the regulatory duty was not a favourable mechanism for taxation. Regarding improvements in Tax Reform Bill, it was informed to the Committee that since the Tax Reform Bill was related to an Amnesty Scheme, contrary to the Government's stance of not granting such amnesties any more, therefore, the recommendation of the Committee in that regard was not accepted, however, a Voluntary Tax Compliance Scheme for traders had been introduced for bringing non filer traders into tax net.
Member (Admn.), FBR briefed the Committee on the budgetary allocation of FBR and its utilization for the current financial year. He said that there were three kinds of budgetary allocations in respect of FBR ie FBR (HQ), Customs and Inland Revenue. On a query raised by the Committee, it was informed that all the LTUs were also included under the main FBR head. The Committee observed that the expenditure incurred during the last nine months was low as compared to the expenditure to be incurred during the upcoming quarter.
The representative of the FBR informed the Committee that the performance allowance of their employees was frizzed which had now been de-freezed, therefore, due to the payment of arrears to the employees and as well as a lump sum payment to the PRAL at the end of the fiscal year, the expenditure would be made higher during the upcoming quarter. On a query by the Committee, the representative of the FBR replied that they had looked into the issues related to the performance of PRAL and would be resolved at the earliest.
The Committee disposed of the matter by showing its satisfaction on the budgetary allocation and its utilization in respect of FBR for the current financial year with the recommendation that FBR should ensure to constitute an internal review committee to review the budgetary utilization on monthly basis.
After detailed deliberations, the committee recommended that FBR should ensure to constitute an internal budget review committee to review the budgetary allocations and its utilization under all the heads of FBR on monthly basis. The FBR should ensure to evolve a mechanism by which the CNICs of non-filers could be blocked for business/banking transactions, etc to bring all non-filers into tax net.
The FBR should make efforts to improve and enhance the capacity building of its IT department. The matter pertaining to Tax Reform bill would be considered in a future meeting of the Committee to make recommendation in that regard. The FBR should ensure to provide details of all the legal problems/issues attached with Alternate Dispute Resolution Committee (ADRC) to the Committee by 30th May, 2016. The FBR should ensure to resolve the issues of ADRC with the Tax Reform Commission (TRC) to make it functional and submit the compliance report to the Committee by 30th May, 2016. The FBR should ensure to make a comprehensive proposal to reduce the sales tax on the locally produced powdered milk in the Finance Bill, 2016-17.