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Government launches online tax payment to broaden tax net

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News Analysis |

The Federal Board of Revenue (FBR), in collaboration with the State Bank of Pakistan (SBP) on Tuesday, 20th of March, cut the ribbon on an online tax collection system, allowing taxpayers to pay taxes and duties using internet banking accounts or ATMs, without going to the trouble of visiting bank branches.

The online tax collection system is live now and the taxpayers can pay their federal taxes including income tax, sales tax, customs duty and federal excise duty through alternative delivery channels; ATM, online banking, phone banking and contact centres at any time, seven days a week. The system is based on the 1Link Biller module, whereby FBR has been added as one of the Billers on the banks’ ‘Bill Payment’ page.

As per details of the system, to pay the taxes and duties, the taxpayers/importers will fill their tax and custom duty payment details in FBR (IRIS) and Customs (WeBOC) to generate PSID (payment slip ID).

Governor SBP Tariq Bajwa said that the online collection of taxes will have an immense positive impact on the payment system efficiency and effectiveness, adding that SBP is also working to extend the coverage of online tax.

The PSID so generated will then be used to access the tax/duty payment details on the banks’ webpage or ATM as the case may be. The taxpayer or their agent will then pay the tax by debiting his/her bank account for onward credit to the respective government account in SBP. The whole process is online and fully automated.

The system was launched by Special Advisor to Prime Minister on Revenue Haroon Akhtar Khan in a ceremony held at FBR. It was attended by Tariq Bajwa, Governor SBP, Chairman FBR, Chairman and CEO 1Link and other senior officials of SBP, FBR and Customs. Haroon Akhtar Khan congratulated the SBP, FBR and 1Link for initiating and completing this important project.

Read more: Taxes should be reduced on mobile phone scratch cards: Senate Committee

Pakistan is considered one of the worst-hit countries by terrorism and money laundering. It appeared again in 2017 as one of the major countries in the US State Department’s annual money laundering and financial crimes volume. In its last year’s report, the State Department concluded by saying, “Pakistan does not have firm control of its borders which facilitates the flow of illicit goods and monies into and out of Pakistan”.

It notes that from January to December 2016, the Pakistani diaspora remitted $19.7 billion back to Pakistan via the formal banking sector, up 2.3 percent from 2015. Though it is illegal to operate a hawala without a license in Pakistan, the practice remains prevalent because of poor ongoing supervision efforts and a lack of penalties levied against illegally operating businesses.

The taxpayer or their agent will then pay the tax by debiting his/her bank account for onward credit to the respective government account in SBP. The whole process is online and fully automated.

The most complex of these problems was still however, the expansion of the tax net. In face of its failure to apprehend tax evaders and subsequently the inability to narrow down the tax base, the government is going for a new tactic to catch tax offenders. It has now started surveys of commercial and high-rise residential buildings across the country to comb people who have bought properties in plazas but are not tax filers, Global Village Space earlier reported.

This move will be the first of its kind in almost 17 years after the dismally unsuccessful door-to-door survey the military had tried to conduct during General Pervez Musharraf’s tenure.

Read more: FBR to catch non taxpayers living in apartment buildings in Islamabad

Broadening of Tax Base DG Tanveer Akhtar Malik, an official of the Federal Board of Revenue (FBR) informed the Senate Standing Committee on Finance about the initial outcome of the plan. He said that the real estate sector is attracting major investment and the FBR has initiated mapping of plazas that have been constructed during the past 10 years. He also said that the Prime Minister, Mr. Shahid Khaqan Abbasi wanted a fruitful tax broadening campaign to be conducted that targets high-value unregistered taxpayers.

Governor SBP Tariq Bajwa said that the online collection of taxes will have an immense positive impact on the payment system efficiency and effectiveness, adding that SBP is also working to extend the coverage of online tax collection system to the provincial taxes and receipts as well


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