June 20, 2003	Friday	Rabi-us-Sani 19, 1424

ISLAMABAD, June 19: The World Bank will provide around $130 million grant for the implementation of restructuring plan of tax administration over a period of five years.

Officials told Dawn on Thursday the decision to this effect was expected to be taken in the forthcoming visit of high officials of the World Bank to Pakistan in August.

The Central Board of Revenue has constituted a committee of high officials who have initially worked out a cost of around $130 million for the restructuring plan of tax administration to make it a user-friendly organization.

The officials said the amount would be approved following the approval of comprehensive medium- and long-term strategy report for reform of tax administration. The report was sent to the bank officials for seeking their comments, suggestions and input, said the officials.

On the basis of this plan, the World Bank will apprise the project for which the bank mission scheduled for first week of August will approve the grant of funding, added the officials.

Elaborating further, they said the major component of the funding would be for automation of the manual process, creation of data bank transaction and to prepare an information system plan, which would provide a quality service to the taxpayer, reduce interaction between the taxpayer and tax collectors, improve voluntarily compliance and address the problem of tax evasion.

Explaining the strategy report, the officials said it contained the design of the administration of reform, which the CBR intends to carry over in the next seven years.

The short-term strategy covering a period of up to 15 months, medium-term from 16 to 60 months and long-term from 61 to 84 months has been worked out.

Another major component in the funding was upgrading the infrastructure of the present income tax offices, located in dilapidated condition buildings and 757 tiny income tax circles office, where each circle officer was responsible for administration, registration, judicial and enforcement function.

The officials said the CBR strategy aimed at co-locating all income tax and sales tax work in about 12-15 units and merged certain function like registration, taxpayers facilitation, information processing and collection.

A proposal to have income tax and sales tax audit at the same place was also under the active consideration of the CBR, which would reduce the compliance cost of the taxpayers, added the officials.