THE Federal Government’s decision to constitute a comprehensive digitization task force for the Federal Board of Revenue (FBR) epitomizes its unwavering resolve to usher in transparency within the tax regime. This strategic initiative endeavours to incorporate those sectors and individuals who have hitherto been wholly or partially evading tax obligations into the tax net. Prime Minister Shehbaz Sharif has sanctioned the establishment of this ten-member task force, helmed by Minister of State for Finance Pervez Malik, with Major General Syed Ali Raza as the vice-chairman. The task force’s composition includes merchants and experts in information technology, ensuring a multifaceted approach to the reforms.
The crux of this endeavour lies in harmonizing data across provinces, revenue institutions, ministries, and governmental departments. By designating the national identity card as the sole identifier for audit purposes, the government aspires to widen the tax base significantly. Furthermore, an automated system encompassing wholesale dealers, distributors, and intermediaries in the supply chain will be instituted. This sophisticated approach aims to capture the intricate details of transactions within the supply chain, thereby mitigating avenues for tax evasion and ensuring a robust revenue collection mechanism.
Prime Minister Shehbaz Sharif has previously articulated his readiness to tender his resignation rather than capitulate to any pressures against FBR reforms. This stance underscores the gravity and significance he attributes to these reforms. The establishment of this task force is an integral facet of the overarching reform strategy, which seeks to modernize and streamline the tax administration process.
The prevailing economic tribulations necessitate an enhancement in the efficacy and transparency of revenue collection agencies. Although the FBR has attained its stipulated targets, the International Monetary Fund (IMF) has imposed stringent conditions, requiring an escalation of the tax-to-GDP ratio from the extant 9% to 13.5% over a triennial period. This mandate necessitates an annual increment of 1.5%, a target that is ambitious yet imperative for the fiscal health of the nation.
To achieve this ambitious objective, the government must implement a series of multifarious measures expeditiously and efficaciously. This entails a holistic approach, leveraging technology and data analytics to identify and plug gaps in the current tax collection framework. The task force’s mandate includes not only the integration of disparate data sources but also the deployment of advanced analytics to predict and preempt tax evasion strategies.
It is anticipated that the fruition of these governmental measures will facilitate the attainment of the requisite revenue benchmarks, thereby fortifying the national economy. This comprehensive reform initiative is expected to yield significant dividends, enhancing the transparency, efficiency, and accountability of the tax system. The successful execution of this initiative is expected to not only augment revenue collection but also to establish a more transparent and efficient tax apparatus.
—The writer is contributing columnist, based in Turbat, Balochistan.
