Proposals for establishment of Pakistan Revenue Authority to be finalized by June 2020

ISLAMABAD: The ministry of finance has been directed to finalize proposals for establishment of Pakistan Revenue Authority (PRA) by June 30, 2020.

The directives have been issued at a meeting chaired by the prime minister on restructuring of FBR held last month.

 

It is decided that the ministry of finance (Revenue Division) to formulate comprehensive proposals for establishment of PRA and centralized collection of General Sales Tax (Goods and Services) by PRA under the ambit of World Bank’s “Pakistan Raises Revenue Project” by June 30, 2020.

 

The meeting discussed the current structure of the FBR that it is archaic and highly bureaucratic, which does not commensurate with technology driven tax administration in vogue around the world.

 

There is need to establish legislative empowered, tailored to task (lean organization) and technology driven PRA.

 

In the interim period, the FBR headquarters needs to be reorganized /articulated on functional lines segregating Inland Revenue and Customs Operations into North and South Zones.

Deputy Chairman (2) of FBR need to be appointed to effectively coordinate and supervise segregated functions of Inland Revenue and Customs.

 

The meeting approved to appoint deputy chairmen for Inland Revenue and Customs by November 30, 2019.

 

Following is the proposed mandate to PRA:

  • Constitutionally empowered and autonomous authority with ‘lean organization’, structured along functional lines.
  • Tax policy entrusted to Ministry of Finance (Revenue Division); guided by political leadership and informed by Tax Policy Board and PRA Board.
  • Disparate provincial revenue authorities should be consolidated into a single authority for each province under the overall coordinated, facilitation, guidance and oversight by PRA (through integrated process).
  • Establishment of Directorate General of Revenue Coordination & Oversight (headed by Director General –Grade 21) at PRA for ensuring fiscal discipline, enhance flexibility and responsiveness of fiscal framework.
  • To address collection, jurisdiction and double taxation issues, GST (including services) be adopted as PRA’s responsibility.
  • Conditional vertical resource distribution formula linked to revenue collection performance under PRA’s coordination / oversight.

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