ISLAMABAD, Nov 21: The government has, in principle, decided to scale down the number of tax members to seven from the existing 11 under the World Bank-funded reforms project of the tax administration.
A notification released here on Wednesday by the Federal Board of Revenue (FBR) says that the number of members will be squeezed to this minimum level under the new FBR rules 2007, which can be increased as there was no capping for a maximum.
A senior tax official told this scribe that the FBR had also sought one year extension from the World Bank for implementation of the decision, which was extended to June 2008 from June 2007. This deadline could be extended till December 31, 2009.
According to the rules, under the current setup there will be three line members (direct taxes, sales tax and federal excise and customs); four functional members (fiscal research and statistics, human resource management, audit and administration); support members (legal, tax policy and reforms, information management systems) and facilitation and tax education.
Under the original concept of reforms as agreed with the World Bank, there would be two line members (internal taxes and customs).
The internal taxes will include income tax and sales tax, while the strength and positions will be adjusted before the implementation of the whole reform project.
A comparative analysis of the CBR Act of 1924, which was replaced by the FBR Act of 2007, showed that the new law had enhanced the scope of the board-related activities and functions empowering it to better achieve reform objectives, such as developing taxpayer friendly culture, creating investment and business-friendly environment and increasing efficiency of work force etc.
Member Legal Mumtaz Shaikh, who carried out the analysis, which was released here on Wednesday, showed the preamble of the CBR Act 1924 provided only for the constitution of Central Board of Revenue and to amend certain enactments for conferring powers and imposing duties on the said board.
The preamble of FBR Act 2007 has, on the other hand, a very wide scope, including enhancing the capacity of the tax system to collect due taxes through application of modern techniques, providing assistance to taxpayers and creating a motivated, satisfied, dedicated and competent professional workforce that is required to perform at an enhanced efficiency level.
Its objective and mission is to be a modern, progressive, effective, autonomous and credible organisation providing quality services and promoting compliance with tax-related laws, while being mindful of upholding values, such as integrity, professionalism teamwork, courtesy, fairness, transparency and responsiveness.
The preamble also includes the role of FBR to regulate the matters relating to fiscal and economic policies; administration management; imposition, levy and collection of duties and taxes.
It further states that it is necessary to reorganise the Board of Revenue to enhance the scope of activities and operations and to have appropriate autonomy and resulting in reconstituting CBR as the FBR.
The FBR Act 2007 allows the government to constitute the cabinet committee for federal revenue (CCFR), headed by the finance minister, as a supervisory body to give guidelines with regard to the policy, planning, reforms, budget and any such other matters referred to it by the Board.
Under the new act, autonomy has also been given to FBR for performing its duties. These duties range from implementing tax reforms, recruitment, allowances and education and facilitation of the taxpayers etc.