ISLAMABAD, Dec 11: The government has agreed with the World Bank to integrate functions of tax administration over a period of time to avoid present duplication of functions as part of Tax Administration Reform Project (TARP).
Officials in the Central Board of Revenue (CBR) told Dawn on Saturday that Pakistan has committed to the World Bank in the agreed strategy document to improve the revenue operation by avoiding present duplication of functions such as audit, collection and enforcement across the departments.
According to the document, managing director, tax and sales tax separately would make it more expensive to comply with and more difficult for taxpayers, who have multiple tax dealings to comply with.
The report says the integration would provide taxpayers with a single point of access, enabling them to easily obtain all the information required to assess their tax liabilities.
However, recognizing the challenges of the change process during the transition period, CBR would maintain the separation of function by tax type (income tax, sales tax, central excise and customs) in the initial reform period with the aim of gradually reducing this over time.
The World Bank has approved the strategy document and on its basis approved a $102.9 million loan to support the Pakistan's reform project of tax administration to be implemented in a period of five years. President General Pervez Musharraf has already approved the reform project to establish a functionally integrated tax administration.
Officials said that in the initial stage of reforms, the government has already posted officers of income tax and customs group in the functional departments-information technology, audit, human resource management, tax policy and taxpayers facilitation.
Similarly, the government also established Large Taxpayers Unit (LTU), in Karachi as a part of experiment to move towards merger of functions of income tax, sales tax and central excise over a period of time.
The Karachi LTU was headed by a regional commissioner of income tax. All the customs, sales tax, central excise and income tax were received at the LTU Karachi. The Lahore LTU was headed by an officer of customs group and excise group with a power of a regional commissioner of income tax.
According to the officials with all these experiments, around 12 regional tax offices will be established where income tax and sales tax will be collected under the same roof with integration of the overlapping functions.
