FBR to Enhance IT Infrastructure with World Bank Loan

Islamabad: The Federal Board of Revenue (FBR) plans to modernize its IT infrastructure, establish new data centers, and implement an automated income tax refund system using a $25 million loan from the World Bank.

In a public interest petition filed by Khurram Shahzad Butt against the FBR and its field formations for failing to enforce a law requiring the issuance of refunds without personal involvement of FBR officers, the FBR submitted a report titled 'Findings and Recommendations of Committee for Effective Enforcement of Section 170A' to the Islamabad High Court.

Khurram Shahzad Butt informed that a Member (Policy) of FBR personally appeared before the court and confirmed that the recommendations for effective enforcement of Section 170A of the Income Tax Ordinance 2001 will be implemented using the expected $25 million loan from the World Bank.

The report indicates that the FBR is currently engaged in a World Bank project aimed at modernizing its IT infrastructure and establishing new data centers to streamline service delivery, including the issuance of income tax refunds. The adoption of IT technology is expected to expedite and enhance the efficiency of refund processing.

However, the report also highlights that the FBR’s e-portal lacks direct electronic integration with the AGPR, which deducts income tax from government employees' salaries monthly. Additionally, the e-portal is not integrated with the government's withholding agents, causing verification issues for tax deducted at the source. This inadequacy in verifying tax deductions by various withholding agents, such as Power Distribution Companies (Discos), Excise & Taxation departments, educational institutes, and others, poses a significant obstacle to enforcing the automated tax refunds process.

The Islamabad High Court stated: "The FBR has submitted a report titled 'Findings and Recommendations of Committee for Effective Enforcement of Section 170A'. The report and recommendations appear comprehensive, and the Member (Policy) has confirmed that these recommendations will be implemented with the anticipated $25 million loan from the World Bank."

The court noted that the petition's objective seems to have been achieved and dismissed the petition, allowing the petitioner to approach the court again if the recommendations are not implemented despite the government's compliance with the World Bank's loan conditions.