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November 27, 2018

FBR scouts for experts to identify potential revenue spinners


November 27, 2018

KARACHI: The Federal Board of Revenue (FBR) decided to hire professionals to identify potential revenue spinners and curb tax evasion as the government received an undisclosed sum from the World Bank to improve the taxation system, sources said on Monday.

The sources said the FBR would recruit economists of PhD or masters level, having working experience and who could provide desirable services to enhance revenue collection. The hiring will be made under the World Bank-funded program, ‘strengthening tax system and building tax policy analysis capacity’. The government received an undisclosed grant from the World Bank.

In the first phase, the FBR will hire two economists for market monitoring and intervention (MMI), two for tax intelligence unit and one specialist to identify gaps in tobacco industry. The economists at MMI will analyse trends in modern tax evasion techniques and formulate recommendations to curb the evasion. Further the intelligence unit will establish link between FBR and field staff to improve the organisational efficiency.

The sources said the FBR is expecting to increase revenue from sale of cigarettes in the country. The consultancy in tax stamp will be acquired to discourage the tax evasion in the tobacco industry.

FBR said the tax evasion flourishes due to smuggling and non-duty paid locally manufactured cigarettes being sold in the market. “To avert this tax evasion it is intended to place a tax stamp on each cigarette pack to track and trace capability,” the FBR said in a report.

The sources said no formal study is available on the quantum of tax evasion from sale of cigarettes in Pakistan. Therefore, the FBR is looking for sector specialist to get technical assistance for e-stamping of tobacco products.

The sources said the FBR through the two different type of analysis would identify tax avoidance and evasion patterns. Further, the economists would be tasked to conduct research on the emerging businesses, such as ride-hailing, where taxation is a complex phenomenon.

The sources said the FBR is also intending to conduct research to identify loopholes in public sector enterprises. The FBR will require services of economists to advise measures to increase revenue collection from the state-owned companies.

Further, the key element of the analyses will also include documentation of private sector through industry classification based on tax type and size to realise actual revenue. The FY2018-19 tax collection target of the FBR was revised downward to Rs4.398 trillion from earlier Rs4.435 trillion. The federal taxes fetched Rs886.53 billion in the first quarter of the current fiscal year of 2018/19.

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