ISLAMABAD: Defending its decision to procure over 1,000 vehicles, the Federal Bureau of Revenue (FBR) has cited access and mobility behind its move while assuring against misuse of vehicles.
In its letter addressed to the Senate Standing Committee on Finance and Revenue, the FBR said that in order to expand the tax net there was a dire need for strong enforcement and audit which could not be achieved without officers’ outreach as “non-filers need to be located physically through surveys and on-spot enquiries”.
The letter comes against the backdrop of the tax authority’s announcement to acquire 1,010 vehicles at an estimated cost exceeding Rs6 billion.
The purchase was to be conducted in two phases, with the FBR making an advance payment of Rs3 billion to cover the first batch of 500 vehicles. The remaining payment would be made following the delivery of the initial batch.
The delivery of vehicles is scheduled between January and May 2025.
In the first phase, 75 vehicles will be delivered in January, followed by 200 in February and 225 in March. The second phase will see the delivery of 250 vehicles in April and the final 260 in May.
The announcement had drawn the Senate body’s ire which had written to Finance Minister Muhammad Aurangzeb urging him to suspend the vehicles’ procurement citing “considerable doubts about the transparency and integrity of the process”.
With the finance minister assuring transparency, FBR Chairman Rashid Langrial had termed the procurement “necessary for the department’s operations”.
The tax body’s letter to the Senate panel underscores the need to identify non-filers and implement effective enforcement mechanisms to ensure compliance among eligible taxpayers, which, it argued, was not possible without visiting the markets and territories due to cash economy.
Highlighting that it needs to work on a war-footing to achieve its Rs1.3 trillion tax collection target which would not be possible unless its officials have the necessary mobility to cover the field, the letter also lamented that it faces a significant challenge related to non-registrations and fraudulent registrations.
“Out of approximately 260,000 manufacturers who should be paying sales tax, only 42,000 are registered with the FBR and even those that are registered are also not fully compliant”.
Noting that factories were located in far-flung areas and hundreds of officials were deployed for sugar production monitoring in locations which lacked public transportation, the FBR recalled that the past practice of asking the sugar mill owners to facilitate its officials in commuting compromised their integrity.
“The mobility arrangement is entirely meant for FBR enforcement drive […] The specifications of mobility arrangement has been kept at minimum specifications level,” said the tax authority, adding that no country in the world had been successful in tax reforms without tax machinery.
