Pakistan sets up commission to eradicate black economy

Pakistan sets up commission to eradicate black economy

Pakistan has constituted a high powered commission for making suggestion to end the black economy or parallel economy.

Finance Minister Ishaq Dar last week constituted a high powered tax commission for identifying bottlenecks in tax system and recommending pro-economic policies.

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In this regard, Federal Board of Revenue (FBR) issued a notification regarding constitution of Reforms and Resource Mobilization Commission (RRMC).

The commission will formulate suggestions for an action plan to curb the parallel economy and to make recommendations for improving financial inclusion in the documented system.

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Furthermore, the commission will review existing revenue policies, evaluate FBR data and macro level, and identify initiatives/measures/policies for resource mobilization, ease of doing business and pro-economic growth. Besides it will identify issues/difficulties/snags/risks of the existing tax system and recommend remedial measures.

The commission will review the budget proposals, evaluate their consequences on business, and advise the finance minister on practical aspects of budget proposals. It will propose amendments in Finance Bill and make recommendations to the finance minister on implications of proposed amendments on businesses.

Members of the commission will review the complexities of tax legislation and recommend simplification e.g. different compliance level for different categories of taxpayers.

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They will review and recommend a robust IT system on modern lines and upgrade existing IT facilities to maximize tax compliance, enforcement, broaden the tax base and provide taxpayer facilitation.

The commission will make recommendations for minimizing taxpayer/tax collector interaction and maximizing trust between the FBR and the taxpayers.

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The commission will also advise restructuring of FBR from the following perspectives: a. To evaluate the possibility of making FBR autonomous; b. To evaluate the possibility of establishing and independent audit system; c. To evaluate the possibility of establishing a separate legal department.

The commission will make recommendations on harmonization of General Sales Tax (GST) between the Federation and provinces and development of a single portal for filing of sales tax returns.

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