A group of sixty-nine senior civil servants participating in the 98th National Management Course (NMC) and faculty of National School of Public Policy (NSPP) visited FBR House, here today.
The group was welcomed by Member Facilitation & Taxpayers’ Education (FATE) Mrs. Riffat Shaheen Qazi. She briefed the visiting officers and faculty of NMC about the organizational structure, working and revenue collection performance of FBR. She highlighted the challenges faced by FBR and proposed way forward to tackle and resolve these issues.
The briefing was followed by a detailed Questions & Answers session. The NMC participants freely asked questions which were candidly and frankly responded to by the Chairman FBR Mr. Ansar Javed himself. He talked in detail about various initiatives launched by FBR to enhance revenue collection and to expand the tax base.
At the end of the Q&A session, the Rector National School of Public Policy Mr. Muhammad Ismail Qureshi thanked FBR for providing the participants of NMC with an opportunity to interact with FBR’s top management and to understand the grass-root issues facing the country’s economy and the revenue collection system.
Chairman FBR Mr. Ansar Javed and Rector NSPP Mr. Muhammad Ismail Qureshi exchanged institutional mementos.
 

  Officers and staff of Federal Board of Revenue held a farewell ceremony at the FBR House Islamabad for the two Deputy Chairmen of FBR Mr. Malik Abdul Samad and Mr. Shahid Rahim Sheikh who are retiring today.
  Addressing the ceremony held in the auditorium of FBR House, Member (FATE) Mrs. Riffat Shaheen Qazi lauded the services of the deputy chairmen. She said that it is a matter of pride for FBR that its officers have reached the highest level of civil service in Pakistan. “We would always look towards them for inspiration and guidance”, she added.
  Dy. Chairman Malik Abdul Samad, in his comments, thanked the seniors, juniors and colleagues for their support during his career.
  Thanking the officers and staff of FBR, the Dy. Chairman Shahid Rahim Sheikh said that he thoroughly enjoyed his career and learnt a lot from his seniors as well as juniors. He said that learning process should always continue, at every stage of life.
  Speaking on the occasion, Chairman FBR, Mr. Ansar Javed praised the dedication, commitment and professionalism of both the Deputy Chairmen, who happened to be his batch mates, and said that they will always be remembered for their meritorious services. He said that they would always remain a part of FBR’s family and expressed his best wishes for their future.
The Chairman FBR also presented mementos to the two retiring officers.
 

A group of Twenty-two participants of 15th Mid-Career Management Course (MCMC) and faculty of National Institute of Management (NIM) Karachi visited FBR House today, as part of their country study tour.
Member Facilitation & Taxpayers’ Education (FATE) Mrs. Riffat Shaheen Qazi welcomed the participants on behalf of Chairman FBR, followed by a presentation on FBR and a Questions and Answers session which was answered by the Chairman and relevant members of the Board. They were briefed in detail about the various initiatives launched by FBR to enhance revenue collection and to expand the tax base.
The Director General National Institute of Management Karachi Mr. Tauqeer Ahmad thanked FBR for providing the participants an opportunity to interact with FBR’s top management, at a time when the budget meetings are in progress. The DG NIM and Chairman FBR exchanged mementos.
 

The Chairman FBR Mr. Ansar Javed, after assuming charge, has started hectic consultation with stakeholders. The first meeting was held with the Lahore Chamber of Commerce & Industry over the weekend.
The Chairman has taken serious note of the fall in revenue and started marathon meetings within FBR. The performance of each LTU and RTO is examined, and the Chief Commissioners are directed to devolve strategies to achieve the freshly assigned budget targets. He has directed Member (IR-Ops) to immediately issue letters to all the RTOs and LTUs highlighting their performance and achievements / shortfalls, and has directed that remedial strategies be made to ensure collection of the assigned targets for the last quarter ending 30th June, 2013.
 

FBR has clarified that no new tax has been imposed on cell phones as is wrongly being portrayed by some quarters. The fixed amount of sales tax on activation stage was first introduced through SRO 390(I)/2001 dated 18th June, 2001, with a rate of Rs. 2000 per cell phone. However, on the request of cellular company operators to encourage the sector, the rate was reduced from time to time. Under SRO 542(I)/2008 dated 11th June, 2008 the fixed rate was Rs. 500 per mobile phone, which was subsequently reduced Rs. 250 per mobile phone. The collection mechanism in all these notifications was based on the old CDMA technology, which required activation/energization of mobile phones by the cellular company operators before they could be operated. However, CDMA technology is no longer prevalent on any mobile network in Pakistan as all mobile networks in the country are presently operating on GSM technology. Under GSM technology only a SIM Card is inserted in mobile phones which are ready for usage. These GSM technology-based mobile phones do not require activation/energization by the cellular mobile network. Due to this technology change from CDMA to GSM, SRO 542(I)/2008 dated 11th June, 2008 had become redundant and the Government exchequer was not getting the proper revenue from this sector as pre-activated cell phones were being imported resulting in a steep fall in revenue despite tremendous increase in volume of import. SRO 280(I)/2013 dated 04-04-2013 recently issued by the Government does not impose any new tax. It only aligns the law with the latest technology. This notification was necessitated to remove the anomalies occurring due to change in technology. It has shifted the time and mode of payment of tax from activation stage to import stage.The standard rate of sales tax under the Sales Tax Act, 1990 is 16% and prices of new mobile phones go as high as around Rs. 80,000/- or more. At the standard rate of sales tax, the amount of sales tax payable on a mobile phone costing Rs. 50,000/- would be Rs. 8,000/-, but under SRO 280(I)/2013 the fixed sales tax is only Rs. 1000/- which comes to around 2%.  Thus the fixed rate of sales tax under SRO 280(I)/2013 dated 04-04-2013 is still much lower than the standard rate of 16% chargeable on all other goods. This reduced fixed rate of Sales Tax has been retained on the request of cell phone operating companies to help and encourage the sector. The impression being created by certain vested interests that the Government has levied a new tax on cell phone is baseless and devoid of fact. The views being presented that imposition of sales tax under SRO 280(I)/2013 will ruin the businesses or lead to smuggling of mobile phones is also not correct as the present notification only brings the tax structure in line with the current cellular technology and it is aimed at safeguarding the interests of the exchequer which were being hurt due to the existence of a notification based on an obsolete technology. Even under the new notification fixed tax rate at a minimal level has been retained on mobile phones to save the industry from any possibility of smuggling. The rate of Rs. 1000/- is only for smart phones and satellite phones (which are admittedly costly phones). The fixed rate of sales tax on ordinary cellular mobile phones (other than Smart Phones and Satellite Phones) is only Rs. 500/- per mobile phone. This minimal rate of fixed tax shows the pro-industry policy of the Federal Government. It also shows that all tax policy changes are well-thought out by the Federal Government and no such policy is implemented which would create problems for the industry.

Federal Government’s Amnesty Scheme for smuggled and non duty paid vehicles has received phenomenal response. Till March 31, 2013, over 34,000 vehicles have been assessed to import duty and taxes at various custom offices all over the country.  The total revenue collected on such vehicles is approximately Rs. 10 billion.
The success is unprecedented compared to the identical facilities allowed in the past. Customs offices have been working over the weekend, beyond the normal call of duty for this to happen.
Considering the wide response and the demand, the Government has extended the last date for availing the Amnesty to 6th April, 2013. The persons in possession of non duty paid and smuggled vehicles can now surrender such vehicles to customs and get them legalized through payment of duty and taxes till 6th April, 2013.
Meanwhile, all Customs offices, in response to the queries received from the Office of Federal Tax Ombudsman, will cooperate with them and provide the data and record of the vehicles assessed so far.
 

Keeping in view the facilitation of taxpayers, FBR officially launched today its Taxpayers’ Facilitation Portal accessible at FBR’s web address http://www.fbr.gov.pk
This major paradigm shift from an official website towards a Taxpayers’ Facilitation Web Portal is the initiative of FBR’s Chairman Ali Arshad Hakeem with a view towards maximum online facilitation, guidance and help for the taxpayers, in line with best international practices.
All the information required by a taxpayer is minimally presented on the portal with the objective of making it more user-friendly. The new interface is designed with the principle of categorization of information and its presentation in a simple but graceful manner with the sole objective of maximum taxpayer facilitation and easy access to required information.
For the facilitation of taxpayers, all the links of online services provided by FBR are placed in a separate but easily visible section on the portal. All the information and links provided earlier on the website are also accessible with more ease.
For the ease of taxpayers, and if someone is more comfortable with the earlier layout of information, FBR’s previous website is also accessible from the same portal.
Taxpayers, stakeholders and general public are encouraged to give online feedback and suggestions through the same portal.
 

The smuggled vehicles’ amnesty scheme notified by the Federal Government, for legitimizing smuggled vehicles upon payment of duty and taxes, has fetched Rs. 3 billion approximately to date, through legitimizing around 10,000 (ten thousand) vehicles across the country.
It is reiterated here again today, that the last date to avail this facility of the amnesty scheme will not be extended beyond 31st March, 2013.
It is further clarified that all Customs’ field formations will remain open on Saturday the 30th and Sunday the 31st March, 2013 as a special arrangement to facilitate persons availing this amnesty scheme. Moreover, designated branches of National Bank of Pakistan will also remain open on aforementioned days.
 

The amnesty scheme notified by the Federal Government, for legitimizing the smuggled and non-duty paid vehicles upon payment of duty and taxes, will expire on 31st March, 2013. The scheme will not be extended beyond 31st March, 2013. The rumors suggesting possible extension in the deadline are absolutely unfounded.
 
2.      Those seeking to avail of this facility of the amnesty scheme must therefore present their smuggled / non-duty paid vehicles to Customs, latest by 31st March, 2013.
 
3.      It is further clarified that the Federal Board of Revenue is determined to redouble its drive against such vehicles after the expiry of the amnesty scheme on 31st March, 2013. Instructions have been issued to the Customs field formations to impound such vehicles, besides lodging FIRs against the persons found in the ownership or possession of these vehicles, provided they are not got legitimized under the amnesty scheme, upto 31st March, 2013.
 

Federal Board of Revenue has conducted computer ballot for selection of cases for audit pertaining to tax year 2011. The selection has been made on the basis of three separate risk parameters for Income Tax, Sales Tax and Federal Excise Duty laws for corporate and non-corporate cases. The business community representatives, who pressed the button for selection of cases, were:-

·         Agha Mujeeb Ahmad Khan, President Rawalpindi Tax Bar.

·         Raja Amer Iqbal, Executive Member Rawalpindi Chamber of Commerce & Industry.

·         Naeem Siddique, President Islamabad Chamber of Commerce & Industry.

Other representatives present on the occasion of All Pakistan Tax Bar Association, Islamabad / Rawalpindi and Federation of Pakistan Chamber of Commerce and Industry, were Mr. M. Aslam Anwar, Mr. Faraz Fazal and Mr. Abrar Ahmad Qazi.

Member (Taxpayer Audit), while welcoming the participants, stated that payment of tax is national duty of all citizens, particularly those who are earning higher incomes. She informed the audience that FBR, through Universal Self Assessment Scheme, has reposed full confidence in the taxpayers’ community. Selection of 12609 cases out of 1.677 million (0.75%), filers of returns indicates that the audit selection is not for revenue generation, it is rather being used as a deterrence. Therefore, the selection of approximately 15% of returns filed in LTUs, 5% of returns filed by corporate cases and 2% of returns filed by non-corporate taxpayers in RTOs have been selected for audit only to promote voluntary compliance and taxpayers’ education. The selection is based on the parameters devised after consultation with all stakeholders.

She informed that FBR has ensured transparency in the process of selection of cases for audit. The list of cases selected for audit has been placed on FBR’s website showing taxpayer’s National Tax Number. 

  A 2-day International Workshop on “Accelerating Tax Reforms” was concluded at Islamabad today. Eleven  international and over 40 local experts including sector experts to the World Bank participated in the 2-day proceedings. Board Members and section Chiefs of FBR were also participants as were Collectors and Commissioners from Inland Revenues & Customs.

The workshop concluded with strategy recommendations aimed at improving Pakistan’s tax systems and resulting revenues. Recommendations covered following major areas:-

-    Tax policy
-    Information Technology
-  Change Management
-  Customs Border Management
-  Inland Revenue Benchmarking
-  Human Resource Policy

The Chairman FBR Ali Arshad Hakeem, who earlier in his welcome remarks yesterday, had highlighted weak areas in revenue collection and the need to finance our development from revenues for a better tomorrow, today thanked participants for working on a weekend and providing detailed policy input.

             Some of the major recommendations included:-

-     Lowering Tax/Duty Rates over time
-     To base policy on empirical data derived from research
-     Software development to be integrated over all taxes & processes
-     To create a Customs force to comprehensively cover borders, and create new customs areas at Torkhum & Chaman.
-     Integrate IT, telecom and EDI Messaging with all agencies and interior ministry.
-     Improve HRM and complete personnel rationalization study

The Chairman, FBR while delivering his concluding remarks, stressed upon the importance of collecting taxes and said “Every rupee we fail to collect will be a rupee not spent on  education, healthcare or development”.

The FBR’s reform management wing will prepare a detailed report on the workshop’s proceedings.

FBR has embarked upon an ambitious acceleration of tax reform for enhancing revenue mobilization. The objective is to increase competitiveness, documentation, and growth of Pakistan’s economy. Increased revenues will allow greater resource allocation for Pakistan’s development needs, while enhanced competitiveness and documentation will encourage both domestic and foreign investment with increased employment for Pakistan’s youth.
Successful implementation of FBR reform acceleration strategy involves broadening national tax base through better documentation of economy, better integrated tax management system through effective Information Technology (IT), and strengthened enforcement to reduce tax evasion. Linkages with all stakeholders will be developed to sustain the reform process.
World Bank has been providing valuable assistance to FBR in its reforms. The Tax Administration Reform Project (TARP) was launched with the Bank’s assistance which ended in 2011. Presently groundwork is being done for a new project for accelerating tax reform for Revenue Mobilization.
 In order to bring reforms on a fast track, FBR initiated here today, a two-day international workshop on “Accelerating Tax Reforms” on 23-24 February, 2013 in Islamabad. The objectives are to share regional and global best practices on tax policy and tax administration, identify key actions and strategic direction in the short to medium term and provide initial input into formulating an outline for a new/revised revenue mobilization strategy.
The two-day workshop would strengthen the ongoing reforms process and create commitment and ownership for result oriented tax machinery at par with international standard among the stakeholders.
Speaking to the participants, Chairman FBR Mr. Ali Arshad Hakeem advised them to focus on following areas while formulating strategy proposals:-

• Country-wide roll out of CREST (Sales Tax software) within a month.
• Identifying top 100 smugglers and an early action against them.
• Effective enforcement of tax laws.
• Arrests in tax frauds.

The areas under study in the said two-day workshop are:-

• Change Management.
• Human Resource Management and Performance Indicators
• Benchmarking IRS
• Benchmarking Customs and Border Management.
• Tax Policy
• Information Technology