FBR is set to modernize its IT infrastructure and implement an automated income tax refund system. This move comes after a petition filed against the FBR for delays in processing refunds.
The petitioner, Khurram Shahzad Butt, challenged the FBR’s inaction on implementing Section 170A of the Income Tax Ordinance, which mandates quicker and more transparent refund processes.
In response, FBR informed Islamabad High Court (IHC) about a $25 million loan from the World Bank that will be used to upgrade IT systems and establish new data centers. This initiative aims to streamline all aspects of tax services, including refunds.
The current FBR e-portal lacks integration with several key entities, hindering automated refunds. For example, there’s no direct electronic link with AGPR (Accounts General Pakistan Revenue), responsible for deducting income tax from government employee salaries. Additionally, the system doesn’t connect with other withholding agents like power companies, educational institutions, and airlines.
This lack of data integration creates significant hurdles in verifying tax deducted at source, making automated refunds difficult.
The IHC acknowledged FBR’s report and recommendations, finding them comprehensive. The court noted the Member (Policy) of FBR’s commitment to implement these plans with the World Bank loan.
While the petition’s objective appears fulfilled, the IHC order allows the petitioner to return to court if the recommendations are not implemented despite the loan being secured.
This development signifies a potential step towards a more efficient and automated tax refund system in Pakistan, facilitated by the World Bank’s investment and FBR’s commitment to IT upgrades.
