ISLAMABAD: The much-awaited Tax Reforms Commission (TRC) report is set to become public as Senate Standing Committee on Finance will hold a debate on the report on June 1.
However, the Senate Committee may hold in-camera meeting over the subject.
The primary presentation of the said report was made by TRC Chairman Masoud Ali Naqvi who highlighted the issue of lack of trust among tax filers.
“All measures to increase tax collection resulted in limited impact mainly due to structural flaws in the system,” Mr Naqvi said talking to Dawn after the meeting in the Parliament House.
Key reforms recommended by the TRC include establishment of a National Revenue Authority (NRA), a body comprising federal and the provincial tax collecting bodies.
TRC was established by Finance Minister Senator Ishaq Dar in September 2014 to address the need for tax reforms in the country with MNAs, senators, chartered accountants, tax lawyers, retired civil servants, economists and representatives of business community as members.
“There are many lacuna in the system, for example some people pay tax to provinces (GST on services) but claim refunds from the federal government,” Mr Naqvi said, adding, “Besides there are dozens of offices to pay various taxes. These need to be centralised to facilitate the tax payers.”
He said that after payment of all taxes at one office, the disbursement would be made through automated systems, which is not difficult in the current era.
To ensure the success, the IT base of the FBR needed to be strengthened and eventually human interaction be reduced.
“The system is not responding either to the needs of the FBR or the tax payers, there is an urgent need to put PRAL under an independent board and PRAL should be headed by an IT professional,” the TRC report suggested.
Talking to Dawn, a member of the Senate Standing Committee on Finance said that the IT system of FBR has not been up to the mark despite heavy investments.
“Many filers are still unable to find their names in the list of active taxpayers,” the Senator said, referring to a World Bank report on difficulties related to doing business in Pakistan.
“The World Bank has said that it takes up to 500 hours in a year for tax compliance in Pakistan,” the member of the Standing Committee said, adding, “This is a major reason why people tend to avoid the tax net.”
However, the TRC report has overlooked the political angle of the reforms and it might face resistance from several quarters, including provinces.
The tax payers face problems because of confrontation between Sindh Revenue Authority and the FBR.