ISLAMABAD, Nov 13: The government has decided to establish a fully automated Sales Tax Risk Evaluation and Management System (STREAMS) for the speedy payment of refunds on the basis of risk assessment to businessmen as a part of restructuring of the tax administration.

Officials told Dawn on Wednesday that STREAMS would maintain taxpayers profiles based on multi-tax data of the regular claimants and suppliers.

With the help of the new system the segregation of cases into reliable and risky categories would be done and the refund to law abiding exporters would become simplified and efficient, while the phenomenon of spurious refund claims would be significantly controlled over the short-term, the officials said.

According to the officials, the preliminary work for the project had already been initiated and the project would be completed in February 2004.

Elaborating the new system, the officials said the submission of the soft copy would result in the determination of the risk assessment of the claim by the STREAMS.

With the entering of soft copy in the system, the officials said, the claim would go either into a green channel that would result in an immediate payment of refunds. They said in case the claim would go into a yellow channel it would result in further scrutiny of the claim. In case the claim goes into a red channel, the payment will be suspended and initiation of audit will be started for confirmation.

According to the officials, the new risk based system would revolve around the risk profiling of taxpayers. They said the sales tax wing of the CBR had already initiated some pioneering work in this area, by developing parameters against which the performance of different categories of taxpayers could be gauged.

This risk profiling activity would help the project team in the development of its risk profiling module for the new system. The mathematical model, the risk indicators and the parameters could be initially designed and tested on the data available from STARR — an automated sales tax refund system.

On the basis of the results from these tests, the officials said, further modification and calibration activities could be carried out so that a fairly reliable system of risk assessment was in place by the time the new project was implemented.

The need for the new system was felt following the observation, that from the processing point of view, the current system did not differentiate between the good, the bad and the ugly exporters. All claims go through the same fixed number of stages, verifications, calculations and payment. Through different number of days between claim filing and payment are prescribed for different categories — gold, silver others, etc., — the same is not always adhered to as the depth of processing remains the same for all the claimants.