TaxPayer

LTUs, RTOs critical of flaws in tax system

ISLAMABAD: Officials at Large Taxpayer Units and Regional Tax Of-fices are not satisfied with the implementation of the Federal Board of Revenue tax systems including Centralised Mahasil, Ex-peditious Refund System, STMS+, Audit Workflow, Tax Accounting and STARR, as overlapping of data creates confusion in exactly lo-cating the glaring mistakes.

A thorough investigation of internal systems by FBR revealed that the end-users in the field formations were generally sceptical about the implementation methodology of these systems. All these systems play key role in verification of data particularly in issuance of refunds, audit and maintenance of data on income tax returns. It was observed that systems, being developed were either in isolation or involved insignificant input from the business domain, lacked effective implementation; whereas the systems evolved by the business domain had considerable acceptance in the field formations as far as implementation is concerned.

The Centralised Mahasil is a system devised to maintain data of income tax returns, ESR is an electronic refund processing unit, STMS+ is a refund processing unit, Audit Workflow is a system de-signed to maintain audit data and Sales Tax Automated Refund Repository Computer System' (STARR) is an invoice verification system for issuance of refund. The report further pointed out that following key issues were hampering the implementation of any system in vogue or systems to be developed in future:

Development of IT Systems lack co-ordinated institutional me-chanism. Institutionalised input from business domain is not ac-counted for, in the development of applications, leaving the users at the mercy of Pakistan Revenue Automation Limited (Pral) to develop systems on the basis of isolated demands from various wings of the FBR. The requirements of business domain are not documented resulting in undesirable duplications and redundan-cies across the systems.

The report further said that all the systems are dependent on tax-payers' profiles created through the registration module. The tax-payers' profile data, in its current state, is highly skewed and in-complete, impeding smooth functioning of any transactional sys-tems.

Systems are developed without a properly worked out training plan for the business users. Training manuals have never been prepared with development/rolling-out of these applications; im-peding effective implementation, the FBR report said.

A Task Force was constituted by the FBR to implement and make operational all the new systems. Priority systems included Centra-lised Mahasil, Expeditious Refund system, STMS+, Audit Workflow, Tax Accounting and STARR. The task force was entrusted to ascer-tain the current status of all these systems in field formations and subsequently prepare a deployment plan including training of us-ers, framing of standard operational procedures and adjustment of general orders to include the features of the new systems.

The FBR considered that in the absence of an institutional ar-rangement for IT related projects within FBR, the prospects of ef-fective implementation of systems are bleak. Development of dep-loyment plan, training mechanism and standard operating proce-dures for implementation and making operational the new systems are by-product/natural outcome of an effective organisational structure and are as such, considered practically not viable at this point of time. Moreover, segregation of development functions and operational functions amongst Pral and business users, respectively, are imperative for effective implementation of IT Sys-tems.

The report recommended that the FBR should constitute a full time core business domain team, comprising of selected officers from field formations and FBR HQ; exclusively authorised to co-ordinate the development of systems with duly authorised teams of Pral. All the IT-related requirements of FBR shall be centralised in the core business domain team to avoid redundancies/duplications in the systems on one hand and hence enhance acceptability of the systems on the other hand.

The taxpayers' profiles should be corrected once for all through the regional offices holding jurisdiction over such taxpayers. Strin-gent procedures may be adopted for new registration of taxpayers, especially with regard to provision of certain essential information by prospective taxpayers. Systems implementation and development should be carried out as complete project including paraphernalia of complete training package, the FBR report added.