FINANCE Minister Muhammad Aurangzeb has, once again, declared his intention to introduce transparency in tax collection through introduction of various reforms, especially digitization of the Federal Board of Revenue (FBR).
Addressing the business community in Peshawar on Wednesday, he said the government was taking steps to reduce human intervention in tax collection which will surely help address the chronic problem of tax leakages or, in other words, corruption in the department.
There can be no two opinions that Pakistan has a huge tax potential, which remains untapped mainly because of the unholy nexus between the taxman and the taxpayer.
It is generally believed and rightly so that the country will not need to jack up taxes and increase the burden on existing tax-payers if sincere efforts are made to realize due tax from all sectors and individuals.
However, this noble objective remains unrealized because of palm-greasing with pockets of individuals bloating on an almost daily basis and the national kitty suffering huge losses.
The FBR, over the years, has moved significantly towards the goal of minimizing human intervention, thanks to introduction of modern technology like e-filing, e-assessment and linking of the Board with important institutions to get necessary input.
The latest is the Faceless Customs Assessment (FCA) system as part of the customs reform that uses technology to process goods declarations and determine taxes.
The system is designed to improve trade efficiency, reduce tax evasion and make it easier to do business.
Its country-wide application has the potential to enhance revenue significantly but fuller transparency can only be achieved if online arrangements are made with the exporting countries to get input data on imports.
Another important measure introduced by the government as an effort to promote transparency in tax collection is separation of the tax policy wing from the FBR, which is now being set up in the Finance Ministry, directly responsible to the Finance Minister.
Documentation of the economy is the most important aspect of the entire exercise but this could not be implemented in letter and spirit because of resistance by the vested interests.
A comprehensive and sustained campaign is needed to be launched with the backing of state institutions for this purpose.
