The Institute of Chartered Accountants of Pakistan (ICAP) has proposed simplifying tax refunds for salaried individuals in Pakistan. Their recommendations aim to expedite the process, reduce administrative burdens, and build trust within the tax system.
Faster Refunds for Salaried Taxpayers:
ICAP suggests that tax refunds of Rs. 300,000 or less for salaried individuals should be directly credited to their bank accounts without the need for a formal application. This eliminates unnecessary paperwork and streamlines the process, provided the refunds are verifiable and taxpayers have the option to upload proof of tax payments if needed.
Targeting a Six-Month Processing Timeframe:
ICAP proposes a processing timeframe of six months for these direct refunds, counted from the date of filing tax returns. This target turnaround time aims to ensure timely reimbursements for salaried taxpayers.
Benefits of a Streamlined System:
- Reduced Burden: Both taxpayers and the Federal Board of Revenue (FBR) benefit from a simplified process, minimizing administrative tasks and paperwork.
- Improved Efficiency: Direct credits expedite refunds, leading to faster access to owed funds.
- Enhanced Trust: A smoother refund process fosters trust and encourages better compliance among taxpayers.
Strengthening Whistleblower Protections:
ICAP recognizes the importance of whistleblowers in identifying tax evasion and fraud. They propose measures to strengthen the existing Whistle Blower Protection and Vigilance Commission Act of 2019.
Key Proposals for Whistleblower Protection:
- Guaranteed Anonymity: ICAP emphasizes complete anonymity for whistleblowers. No FBR field officer should be able to access their personal information.
- Rewarding Information: Reasonable rewards based on recovered tax should be directly deposited into whistleblowers’ bank accounts to incentivize reporting.
- Accessibility through Tax Asaan App: ICAP suggests incorporating whistleblower reporting features into the FBR’s Tax Asaan mobile app for wider accessibility and usage.
The Road to a More Efficient and Transparent Tax System
ICAP’s proposals address critical areas within Pakistan’s tax system. Streamlining refunds for salaried individuals and bolstering whistleblower protections are seen as strategic steps towards a more efficient, transparent, and trustworthy tax environment. These measures have the potential to encourage higher compliance rates, ensure timely refunds, and ultimately benefit both taxpayers and the government.
