In the past, delinquent taxpayers had committed tax frauds, but these cases remained undetected due to several reasons. Now, automation and data exchange has helped the CBR in unearthing tax fraud cases through an effective system. However, board would not allow anyone to evade the authorities.
He said that there are many reasons for smuggling of goods in Pakistan. Historically, we have porous borders with the neighbouring countries and Afghan Transit Trade (ATT) is a legal commitment between Pakistan and Afghanistan to be followed. Instead of administrative measures, smuggling could be more effectively checked through tariff rationalisation. The administrative steps taken in the past to control smuggling did not help very much.
The government is examining possibility to reduce duties and taxes on major smuggling prone items to discourage smuggling. Rationalisation of duty structure on the smuggling prone items would result in increasing imports.
He said the CBR is trying to generate revenue from imports of these items. Major smuggling prone items would no more be attractive for smugglers, as their cost, through illegal channels, would increase.
Talking about data warehouse, he said that a data bank would be ultimately established by next year to verify declarations made by the taxpayers. The only way to confront the taxpayer is to show documentary evidence of his income, which could not be denied by the taxpayer.
This could only be possible with the electronic data exchange and third party information to prove concealment or wrong declarations. Answering to another question, he said that Pakistan has a reasonable tariff structure on the import of goods.
About transfers and postings of tax officials, he said that an electronic system is being developed to maintain complete profiles of the tax officials. The data would be used at the time of his transfer to any station. He admitted that transfers and postings orders were not followed in few cases. However, this issue would be strictly addressed with the help of electronic system.