July 13, 2002	Saturday	Jamadi-ul-Awwal 2, 1423

ISLAMABAD, July 12: The government will have to implement the remaining three major milestones under the tax reforms programme agreed with the International Monetary Fund (IMF) latest by October 31, 2002 to qualify for last tranche of poverty reduction and growth facility (PRGF).

These milestones that have now been made part of the letter of intent (LOI) would include sales tax and customs refund rules, customs administration plan and model income tax office.

The reforms were part of a three years SDR 1.03 billion (about US $1.37 billion) PRGF arrangement.

Under the programme, CBR will implement revised sales tax and customs refund rules and procedures by September 30, 2002.

This would help reduce the incidence of incorrect claims and payments.

The tax authorities would also prepare customs administration reform plan latest by September 30, 2002 to facilitate the taxpayers.

Similarly, model income tax office for small and medium taxpayers in Lahore will be established and would come into operation by October 31, 2002.

The unit will be based on functional organization of income tax to facilitate the taxpayers.

Central Board of Revenue (CBR) has already set up the large taxpayers unit (LTU) in Karachi, which will deal in all domestic taxes. The LTU is in operation from July 1, 2002.

According to the LOI, business procedures within CBR were being reformed, with the help of World Bank-financed consultants.

Human resources management will be revamped over the next 12- 15 months, including by late 2002, recruitment procedures that will emphasize CBR relevant special skills, a move to more merit- based promotion and remuneration rules and developing a system of performance-related bonuses. A model sales tax collectorate in Karachi in a modern building with open layout was expected to start working by September 2002.

Modern information technology will be introduced at all levels, with focus, in the short term, on providing the LTU with a data base integrated across taxes, and PC-based information systems.