ISLAMABAD, March 14: The Planning Commission has called for “thorough scrutiny” of the CBR’s Rs9.5 billion proposed Tax Administration Reforms Programme (TARP) as its PC-1 was found to be “very sketchy and lacked basic information”.
Informed sources told Dawn here on Monday that the Planning Commission wanted that TRAP 2005-2010 maga project must contain detailed financial and economic analysis which should contribute to 0.2 per cent tax-to-GDP ratio increase annually.
The Commission believed that customized software was proposed to be procured at a cost of Rs3.177 billion which was 33 per cent of total capital cost and 44 per cent of the total foreign aid.
This cost, the Planning Commission said, seemed to be highly exaggerated unless proved otherwise.
The Central Board of Revenue (CBR) has been asked to provide monitorable targets of project activities with time frame of implementation with responsibility for execution.
The Commission asked a number of questions which were replied by the CBR. An amount of Rs2 billion (21.7per cent) has been shown for computer hardware/allied equipment. Whereas details of these equipment and Unit cost have not been mentioned in the PC-1, the details regarding hardware/allied equipment were given in the PC-1, the CBR said.
The commission observed that out of total project cost of Rs9.5 billion, the 15 per cent was for infrastructure upgradation and development i.e. Rs1.4 billion including foreign aid of Rs1 billion. The scope of physical works includes development of large tax payers unit in Islamabad, 12 regional tax payers offices at different places along with transit accommodation, 60 tax payers facilitation centres and the model customs collectorate. But it was not mentioned in the PC-1 as to why the World Bank’s loan amounting to Rs1 billion exactly (1054 million) was being obtained for the construction of buildings. It would be appropriate for the Revenue Division to finance the construction of physical works from local source.
Both the infrastructure upgradation and development works would be executed at a total cost of Rs1406 million. But nowhere in the PC-1, the extent of refurbishment/upgradation and new construction works was indicated. It was necessary that PC-1 of subject project should provide the comprehensive statements showing the details of upgradation and new construction works, separately.
The Planning Commission said that the proposed physical works were to be carried out at more than 74 locations throughout Pakistan over a period of three years and costing Rs1.4 billion.
As per the Ecnec’s instructions, and for ensuring quality construction and timely completion of the works, a professionally competent experienced project director be appointed along with technical support staff with necessary logistics.
About this objections, the CBR replied to the Planning Commission that an independent programme manager was being appointed along with technical support staff and logistics.
In its reply, the copy of which was also made available to this correspondent, the CBR said that financial/economic analysis of the project have been made and enclosed with the PC-1.
About the procurement of customized software, the CBR relied that in-depth research and analysis have been done to reach the estimate for this software. International and domestic cost estimation techniques and models have been used. Big and comprehensive customized software cost was between $10-50 million. As an international reference South Africa and USA case studies for software acquisition have been studied. CBR at this point in time has prepared flow diagrams and overall modules for direct taxes and sales tax. Their detailed specifications would be prepared with the help of technical assistance team of the World Bank.
For Customs, detailed specifications are available for review if required. It consists, the CBR said, of approximately monitorable targets of the project activities with time frame work of implementation with responsibility were given in the PC-1.
