PkRevenue.com – The Institute of Chartered Accountants of Pakistan (ICAP) has recommended that tax authorities facilitate direct refunds to the bank accounts of salaried individuals.
In its budget proposals for the fiscal year 2024-25, ICAP suggested that refunds amounting to Rs. 300,000 or less, which are created for salaried persons, should be directly credited to their bank accounts without requiring a formal application for refunds. This proposal aims to simplify the refund process, provided that the refund amounts are verifiable and taxpayers have the option to upload evidence of taxes paid.
ICAP proposed that these refunds be processed within six months from the date of filing tax returns. This initiative is intended to streamline the refund process, reduce the administrative burden on both taxpayers and the Federal Board of Revenue (FBR), and ensure timely refunds for salaried individuals. By directly crediting refunds, the process becomes more efficient, helping to build taxpayer trust and compliance.
Additionally, ICAP highlighted the importance of reinforcing the Whistle Blower protection mechanism, initially introduced through the Whistle Blower Protection and Vigilance Commission Act, 2019. The Act, published on November 1, 2019, aimed to protect individuals who report tax evasion, inconsistencies, or tax fraud. However, ICAP noted that the Act has not yielded significant results due to a lack of trust.
To address this issue, ICAP proposed measures to ensure complete anonymity for whistleblowers who provide information regarding tax evasion or fraud. No information about the whistleblower should be accessible to any FBR field officer. Furthermore, ICAP recommended that whistleblowers be eligible for reasonable rewards based on the tax recovered due to their information. These rewards should be directly credited to the whistleblower’s bank account. To enhance accessibility and usage, ICAP also suggested incorporating this feature into the FBR’s Tax Asaan App.
These proposals reflect ICAP’s commitment to improving the efficiency and fairness of Pakistan’s tax system. By directly crediting refunds to salaried individuals and protecting whistleblowers, ICAP aims to foster a more transparent and trustworthy tax environment. These measures are expected to encourage higher compliance rates and ensure that taxpayers receive their due refunds promptly, thereby enhancing the overall effectiveness of the tax administration.
In conclusion, ICAP’s recommendations for direct refund credits and reinforced whistleblower protections are strategic steps towards a more efficient and trustworthy tax system in Pakistan. By simplifying the refund process for salaried individuals and protecting those who report tax fraud, these proposals aim to build a more transparent and compliant tax environment, benefiting both taxpayers and the government.
