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Paving way for RGST
- Friday, December 24, 2010 - From Print Edition


KARACHI: The Federal Board of Revenue (FBR) has formally established two more regional tax offices in Karachi for smooth functioning of tax operations under the reformed general sales tax (RGST), sources said on Thursday.


“Now three regional tax offices would be operational in the southern port city,” a senior official said on the condition of anonymity.


“The step is being taken to streamline tax collection under the RGST regime,” the official said.


The government aims to implement the reformed general sales tax to broaden the tax net and increase revenue collection. The government had presented a bill before the Parliament and the Senate. The Senate had approved the bill after some amendments. However, the government is facing difficulties in getting approval from the National Assembly as members from opposition and Treasury are against the proposed implementation.


The official said that the revenue body on Wednesday had announced posting of senior officials at the three RTOs in Karachi.


According to the FBR letter, Imtiaz Ahmed Barakzai would lead as Chief Commissioner Inland Revenue of RTO-I. Meanwhile, Muhammad Raza Baqir and Shahid Hussain Jatoi are posted as chief commissioners of the remaining RTOs.


Earlier in April, the revenue body had planned to set up three RTOs from July, but it was later postponed due to some working difficulties.


Another senior official said that the introduction of two new offices is to separate corporate and non-corporate cases so that the tax officials work properly.


“One RTO would deal with only corporate cases and the remaining two would deal with individual and salaried taxpayers,” the official said.


Sources said that after the formation of Inland Revenue both the sales tax and income tax were dealt at the RTO Karachi, making it difficult to resolve taxpayers’ issues.


The FBR had intended to increase the total number of RTOs to 16. The RTOs are established under the tax administration reform programme (TARP) funded by the World Bank to facilitate taxpayers other than taxpayers having huge turnover.


Before the formation of RTOs, the tax offices were scattered at various places in Karachi and the taxpayers were facing problems in resolving their issues.


Critics said the plan would drag the revenue body towards past and the taxpayers will again face similar problems.


“After hectic efforts, the FBR gathered all the tax offices at a building and the taxpayers are happy to get their issues resolved,” a tax official at the RTO Karachi said.


The official said that it would create mess and the taxpayers will again go from one office to another to resolve their issues.


Meanwhile, tax consultants have supported the decision of the FBR and said that it would improve the working of the tax administration.


“We have no objection on three RTOs in Karachi,” said Ali A Rahim, President, Income Tax Bar Association. “But it should facilitate taxpayers,” he added.