FBR unveils software for expeditious process of sales tax returns

KARACHI: The Federal Board of Revenue (FBR) has launched a pilot run of IDEA software for expeditious processing of the sales tax returns, Dr Aftab Imam, chief commissioner of the Inland Revenue, Corporate Tax Office (CTO) Karachi, said on Tuesday.

“To quickly process the sales tax returns being submitted in huge quantities every month by the taxpayers, a state-of-the-art IDEA software has been introduced at the Inland Revenue Department where the pilot run was going on smoothly; hence, it was being expected that this software will be fully launched in July 2022,” he said at a meeting with the office-bearers of the Karachi Chamber of Commerce and Industry (KCCI).

He invited the KCCI’s delegation to visit the IR department to witness the performance of IDEA software, which would make things easier and help deal with the problems being faced by the taxpayers in submitting sales tax refunds.

The chief commissioner also said that although installation of Point of Sales (POS) machines was currently mandatory for bigger stores/shops falling under the Tier-1 but eventually, every shopkeeper will have to get the POS machines installed at their premises, which was the only way to ensure that all the taxes being generated from sales were directly being submitted to the national exchequer.

To improve the functioning of IR department, all the recruitments were now strictly being done purely on the basis of merit so that competent and hardworking workforce could be created, which should facilitate the taxpayers instead of creating problems.

Chairman Businessmen Group and former president of the KCCI Zubair Motiwala, who joined the meeting via Zoom, said that many issues mostly pertaining to issuance of notices have been lying pending at numerous offices of the IR department, which need to be resolved on a priority basis.

Huge number of notices, including withholding tax and audit were being issued to the taxpayers without any justification, which was a very serious issue and hindering the government’s ease of doing business policy, he said, and suggested that instead of seeking entire data and documentation from the taxpayers, the FBR should only collect information about any suspicious/missing transactions without disturbing the entire flow, he said.

Although the taxpayers have been regularly submitting all the documentations on a monthly basis, the FBR officials without taking the already submitted documentation into consideration, demand the same documents again and any failure or delay in doing so creates a lot of problems for the taxpayers who find themselves stuck up in a web of harassment.

“To deal with these kinds of issues, it is really necessary to adopt state-of-the-art and completely flawless IT solutions as per international standards which would reduce human interaction and help in minimizing the incidents of harassment”, he added.

KCCI President Muhammad Idrees suggested that the FBR should focus on other cities, as well, because it seems that the current policies were being implemented in Karachi only, which, despite so many odds and challenges, continues to contribute more than 65 per cent revenue to the national exchequer, the business community of this city was being compelled to face notices and go through harassment. “Instead of squeezing the business community of Karachi, uniform policies have to be devised and effectively implemented all over the country”, he added and advised that tax collecting authority should initiate market-based awareness sessions which will be fully facilitated by the KCCI.

While appreciating the sincerity of Chief Commissioner towards promptly resolving the grievances being faced by the business community, Muhamad Idrees mentioned that a particular case, which was pending since last six months, was instantly resolved within one day as soon as it was brought to the notice Dr Aftab Imam who always tries his best to get other cases referred by KCCI resolved as well which pertain to any other department.

He said tax was a by-product of a vibrant economy and efforts for increasing tax collection can only yield desirable results through sustainable growth in economic activities.

The measures taken through the Supplementary Finance Bill will have a significant impact on the poor and middle-class segments due to increase in prices of consumer goods.

“A 17 per cent GST imposed on formula milk, enhancement of tax from 5 per cent to 12.5 per cent on imported vehicles, 17 per cent increase in prices of mobile phones exceeding $200 and Sales Tax on import of raw material which has also been increased from 5% to 10% while withdrawal of exemptions worth Rs31 billion will prove counterproductive to the economic growth and business development”, he added.

He also said that it was very unfortunate that the FBR has been allowed to freeze bank accounts of businessmen and can enter any premises. “Such discretionary powers to tax officials were fueling corruption in the system. Such measures should only be taken after the businessman is proven guilty and should not be used as a tool to harass businessmen.”

Idrees also pointed out that the taxpayers were being harassed by issuing notices for monitoring and audit of multiple tax years and they were being compelled to comply with these notices in a short span of time of merely 4 to 5 days.

“Hence, I propose that the field formations should be restricted from initiating proceedings of multiple years at once. Also, some minimum time period should be prescribed under the law which should be provided to taxpayers for responding to a particular notice,” Idrees said.

“To make the tax mechanism more efficient, unnecessary powers of the FBR should be curtailed, the audit process should be reformed and laws should be passed for harassment by minimising person-to-person contact.”