Scanners to be used to curb smuggling

ISLAMABAD: A marathon deliberation is expected to be held under Prime Minister Shehbaz Sharif within the next few days to finalise an overhauling plan to implement administrative and policy changes in the Federal Board of Revenue (FBR).

Earlier, it was planned for Saturday but postponed, and a new date will be finalised soon.

After deliberations, an official summary would be moved for securing approval of the prime minister and federal cabinet in the coming days on fundamental changes in the tax collection machinery.

The FBR chairman has held deliberations for more than one month and chalked out an overhauling plan to get the approval of the premier.

Rashid Mahmood Langrial along with the McKinsey team, a consulting firm hired with funds from Bill and Malinda Gates Foundation through Karandaaz, prepared a detailed presentation comprising almost 200 slides for introducing digitisation in the FBR, establishing Model Units for Customs and Inland Revenue (IR) in Karachi, and raising more than Rs100 billion for achieving complete overhauling of Board within few weeks. All these mega plans are being prepared to overhaul the FBR when the tax machinery faced a revenue shortfall of Rs98 billion for August 2024, and is now poised to face another blow in the ongoing month (September) when the expected shortfall might be higher than the last month.

Under the proposed plan, the FBR chairman is all set to propose the overhauling of administrative and policy level changes. Under the administrative overhauling, one of the officers from Punjab, Ali Mohammad Khan, worked for introducing overhauling in the tax collection machinery with the assistance of McKinsey.

It has been proposed that the Customs Intelligence would be assigned to place scanners at all entry points and bridges within the country at the Indus River to curb smuggling and the Directorate of Intelligence and Investigation Inland Revenues (IR) would be assigned to undertake operation related to inland taxes such as income tax, sales tax, and federal excise duty.

On digitisation, it is planned that the FBR would be connected with Nadra and artificial intelligence (AI) would be used to identify potential tax evaders as well as data integration with other departments would be linked to broaden the narrowed tax base.

The premier would be briefed that the tax base was highly skewed as 45,000 to 50,000 individual and companies were bearing the burden of paying taxes out of total 5.5 to 6 million filers. More than two million are nil filers who only come into tax net for getting benefits of becoming part of active taxpayer list (ATL).

The FBR plans to increase tax collection through monitoring of Withholding Taxes under the SWAPS (System for Web-Based Automated Payment System) for checking illegal sales tax adjustments hovering around Rs1 to 3 trillion being siphoned off from the national exchequer allegedly through fake and flying invoices.