ISLAMABAD: Minister for Finance, Revenue and Economic Affairs, Dr Abdul Hafeez Shaikh expressed that the government's chief objective is to form a fair, equitable and a corruption-free tax system. The minister said this while he was chairing a day long meeting of the tax Reform Coordination Group (RCG) on Sunday.
The RCG, which is divided into three sub-groups namely Sales Tax and Federal Excise, Income tax and Customs was formed by the Finance Minister in July 2010 to assist on matters related to adoption of modern tax administration, formulation of tax policies and facilitation of taxpayers. It includes former FBR chairman and also representatives from trade and industry. The three sub-groups presented their reports on proposed reforms in their respective areas.
The Sales Tax and Federal Excise Sub-group including Abdullah Yusuf, Ali Jameel and Arshad Zubari presented their recommendations on the Reformed GST (RGST). The subgroup questioned the awareness of FBR in implementation of the RGST and emphasised a reduction in pending refund claims. It advised the creation of a data warehouse of third party data to broaden tax base and also called for diminution in the tax gap.
The Customs sub-group comprising of Ahmed Waqar, Muhammad Sulaiman, Abid Hassan and Shahid Abdullah highlighted that Pakistan Customs needs a multi-faceted approach for its reforms program. It requires skilled manpower, robust automation system and sustained commitment from political leadership and senior management. The report stressed on administrative issues of the Post Clearness Audit, internal audit and certain infrastructure measures. The sub-group also presented recommendations to improve unauthorized trade, counter smuggling and sustenance of customs integrity.
The recommendations of the Income Tax Sub-group consisting of Vakil Ahmad Khan, Chaudhry Muhammad Arshad and Syed Mohammad Shabbar Zaidi called for establishment of a Fiscal Policy Board to be headed by the Finance Minister. The Board would be open for the inclusion of Chairman FBR, renowned economists, and stakeholders like FPCCI, APTMA, and ICAP.
The focus of this Fiscal Policy Board will be on industrial growth, enhancement of foreign exchange earning and export. Its formation will help split issues of policy formation and execution of policy. In addition, the report called for a review of the functional organizational setup of the FBR. The Finance Minister instructed the FBR to formalise the recommendations in order to attain early approval from the government.
The Finance Minister appreciated efforts of the three sub-groups and assured that recommendations would be given highest consideration. The meeting was attended by members of RCG, Deputy Chairman Planning Commission, Governor of State Bank of Pakistan, Secretary Finance, FBR Chairman and officers from FBR and the Ministry of Finance.