PM directs FBR to bring 4.9 million wealthy individuals into tax net

Prime Minister Shehbaz Sharif has directed officials of the Federal Board of Revenue (FBR) to bring 4.9 million rich and affluent individuals into the tax net without burdening the poor.

According to a statement from the Prime Minister’s Office on Thursday, Prime Minister Sharif chaired a four-hour review meeting that focused on FBR reforms and digitization. The session included updates on the progress of the Inland Revenue and Customs reforms over the past eight weeks.

“FBR’s digitization process is being overseen by internationally renowned consultants McKinsey and initial results are promising,” noted an FBR spokesperson.

Prime Minister Sharif highlighted a major achievement: “In the last four months, tax refund fraud of 800 billion rupees has been detected. We will further improve the tax refund system,” he said. He also expressed concern over the delays in several FBR reform projects, calling them “extremely unfortunate”.

The FBR update revealed that 83,579 tax cases, amounting to Rs 3.2 trillion, are pending in various courts and tribunals. “Since the tenure of the current government, various steps have been taken to resolve tax cases, with 63 cases worth 44 billion rupees settled in the last four months,” the spokesperson added.

Advanced technology has identified 4.9 million people with the ability to pay taxes. The prime minister asked the FBR officials to prioritize taxing the rich and affluent among them while sparing the poor.

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The meeting also discussed the retailer-friendly mobile app of FBR, which has registered 150,000 retailers from April 1, 2024. Prime Minister Sharif urged to continue consultations with retailers to make this system more effective.

The Prime Minister directed to increase the number of appellate courts to expedite the resolution of tax cases, with a target of setting up 100 courts. He also ordered the creation of a performance dashboard for these courts.

Prime Minister Sharif stressed that there should be no delay in payment of sales tax refunds and called for an immediate strategy to recover illegal refunds granted in the past. “Fraud Detection and Investigation Department of FBR needs to be fully digitized,” he argued.

He further directed the integration of all ongoing FBR reform projects into a centralized system and supported the use of cutting-edge technology and skilled personnel in digitization efforts.

“There will be no delay in providing funds to upgrade the customs system,” Prime Minister Sharif confirmed. It directed the FBR to come up with strategies for designing and implementing new system software and for reforms in the Pakistan Revenue Automation Authority (PRAL).

FBR officials announced the implementation of the Integrated Transit Trade Management System (ITTMS) at the Pakistan-Afghanistan border at Torkham and Chaman from October 2024. “International model single window facilities will be established,” they said.

Development of Automated Entry-Exit System (AEES), based on advanced scanning technology and linked to Web-Based One Customs and Pakistan Single Window, has also started. Initially, AEES will be implemented at the four ports of Karachi and airports at Karachi, Multan and Peshawar. Prime Minister Sharif also gave instructions for its implementation at Gwadar Port.

Finally, FBR officials introduced the Single Sales Tax Return system, already in place in the telecom sector, which will link the FBR with the revenue authorities at the national level. Prime Minister Sharif has directed to implement this scheme to all taxpayers by October 2024.