Finance Minister Asad Umar Wednes-day directed chairman National Database & Registration Authority (Nadra) to examine proposals for broadening of tax base through effective use of data already available with Nadra. While presiding over the first meeting of the FBR Policy Board, it was decided that suggestions will be reviewed by the board in detail for further action.
"The Nadra would inform FBR Policy Board how the available data (CNIC-based information) could be used for tax purposes. Or from taxation angle, how effectively Nadra's data can be utilised for documenting business transactions and expanding the tax net. The Nadra chairman would brief the FBR Board," sources said.
The meeting also decided that the Senate Standing Committee on Law and Justice shall be asked to review FBR laws where criminal investigation agencies have an overlapping jurisdiction with FBR so that the authority of FBR may be ascertained. The FBR Policy Board, created under the FBR Act 2007, met here on Wednesday.
The finance minister is the chairman of the Policy Board and the ministers for commerce, textile, industries and privatization are the ex officio members of the Board along with chairmen standing committees on finance and revenue of the Senate and National Assembly. The chairman FBR is the secretary of the Board. Among the nominated members (in advisory capacity) are Abdul Razak Dawood, Hammad Azhar, Senator Kauda Babar, Syed Javed (IT professional ), Usman Yousaf Mubeen (chairman Nadra) and Abdullah Yousaf (former chairman FBR).
Former Chairman FBR Abdullah Yousaf stressed the need for "systemisation through automation" so that the elements of harassment and use of discretionary powers may be minimised.
He was also directed by the chair to make a detailed presentation on the audit and inspection system of FBR and suggest improvements in the system. The presentation will be first shared with minister of state for revenue.
A member of the Policy Board strongly suggested the use of CNIC as sole identifier to document all economic activities. The main effort is required to document all CNIC-based economic activities which cannot be refuted by the potential taxpayers in the presence of authentic database.
The Federal Board of Revenue (FBR) should document all computerised national identity card (CNICs) number-based economic activities and register new taxpayers on the basis of the CNIC, which is used to carry out all kinds of transactions including banking transactions, utility services and buying/selling activities. The CNICs are equivalent to the national tax numbers (NTNs), sources said.
For this purpose, linkage is needed between the FBR's database and all other databases having CNIC-based activities. The FBR needs real time basis linkages with the relevant organisations including Nadra, banks, motor vehicles registration authorities, provincial authorities and other utility service providers. In the presence of such real time basis linkages, the FBR would be in a position to document all CNIC-based business activities and transactions, sources said.
The chairman FBR gave a detailed briefing on the working of the FBR and specially mentioned the actions recently taken by it to improve its performance. The chairman briefed about separation of tax policy from administration, draft of FBR Transformation Plan, ratification of the Swiss Avoidance of Double Taxation Treaty, identification of 152,201 Pakistani nationals with undeclared assets abroad, electronically link of retailers with FBR, issuance of notices to 6,451 high net-worth non-filers, (revenue recovered Rs 245 million), identification of 4,961 potentially undeclared properties abroad, objective criteria performance management, and creation of Integrity Management Unit.
All the ex officio and nominated members congratulated the finance minister on the formation of the Policy Board after such a long time and welcomed the stance of the PTI government to consult with non-governmental members for improvement of tax system of the country.
After a detailed briefing by the chairman FBR and sharing of views by the members, Minister of State for Revenue Hammad Azhar said that it is his earnest desire that the FBR Policy Board may design terms of references (ToRs) for bridging the gap between policy and administration. It was also decided that the Policy Board shall hold its regular meetings on quarterly basis and the next meeting will be held in mid of March.