The document discusses tax simplification in Pakistan, outlining its significance, types of taxes, and recommendations for reforming the tax system. It emphasizes the need for clearer rules to combat tax evasion and enhance revenue collection while addressing public perceptions about tax misuse. The Federal Board of Revenue (FBR) is mentioned as the regulatory body focused on improving tax enforcement and efficiency through modern techniques and taxpayer education.

2. Welcome
BY
Imtiaz Nawaz 26
Faiz Subhani 43
In guidance of:
Dr, Ashfaq Sb.

3. Tax Simplifications
&
FBR

4. Contents
What is tax
Types of taxes
Tax simplification
Importance of tax simplification
Recommendations for tax simplification
Mind sets of people about tax system
Solutions

5. What is FBR?
Organizational structure of FBR
Strengths of FBR
Impact of tax simplifications on FBR

6. What is tax?
 A compulsory contribution
to state revenue, levied by
the government on workers'
income and business
profits, or added to the cost
of some goods, services,
and transactions.

7. Types of taxes

8. Tax Simplifications?
 It refers to simplify and clear the
rules and regulation about tax
calculation and collection.
REASONS
 Complexity permits additional
ways to shield income from tax
 Complexity increases mistakes in
calculating tax liabilities

9. Objective of simplifying tax system
 Reasonable simplification can
more adequately combat tax
evasion and avoidance
 Simplification would make
standard enforcement policies
more effective without
increased enforcement
spending.

10. Learning Objectives
 To provide easy way to tax
payers (reduce ambiguity)
 To communicate effectively
 Increase tax collection
 To enforce policies more
effectively
 To make FBR more efficient

11. Policies about tax in
PA K I S TA N
 Income tax ordinance 2001
 Sales tax act 1990
 Federal excise act 2005
 Federal board of revenue act 2007
 Income tax amendments 2016

12. Recommendation of taxation
reforms
By National Tax Reform Commission
 Salaried Persons be required to file the standard
return of total income under Self Assessment
Scheme.
 The basic rate of tax for private companies should be
reduced
 Existing pattern of tax incentives should be reviewed
and the exemptions that favour specific entities
should be discontinued.

13.  All business income of charitable and religious trusts
and welfare foundations may be made subject to tax
 Small retailers without account books and with
annual turnover not exceeding Rs.400,000/= be
made subject to an annual tax of Rs.600/=.
 Tax payers maintaining regular books of account for
their business or profession be eligible for self
assessment scheme.
 Tax evaders may be isolated and subjected to social
rejection by debarring them from holding social and
political positions.

14. Indirect taxes
Custom duties
 Custom duties should not be used as the principal
source of revenue generation
 The rates of duties should be kept as low as possible
because high tariff is responsible for inducing
smuggling and under-invoicing.
 There should be a thorough re-examination of the
standard rates of rebate and issue of notification in
individual cases should be stopped.

15. Sales tax
 Role of revenue generation should be assigned to
the sales tax which should emerge as the major
revenue generation tax.
 Sales tax should be levied across the board on all
the imported goods and domestic production other
than agriculture produce and unprocessed food.
 Standard rates of adjustment for different raw
materials may be prescribed.

16. Public mind sets
Following responses from public adequate to indicate their
perception:
 Whatever money is collected is looted by rulers are spent
on unnecessary luxuries of the powerful classes of
Pakistan.
 “Government wastes our money. If people believed their
money will be used for health, education, infrastructure,
etc., 90% will pay.”
 “I do not see good use of money in any case. The state
is not fulfilling its contract of protecting life, property, and
health. So why should we fulfil our contract”

17.  “If bigger sharks do not pay taxes and get away with
it then why should the middle-class pay?”
 Focus on Indirect Tax rather Direct Tax (its effects
our businesses)
 Government unable to Control Corruption or change
the Bureaucratic Mind-set
 “It is cheaper to evade taxes than to pay them.”

18. Improve tax system
Following are some recommendation to improve Tax
System resulting in change of General Public Mind-set;
 Develop a system with key features of universal self
assessment with taxpayer education and customer
service.
 Initiate education of taxpayers and withholding
agents through a well-integrated programme of
media campaign, booklets and brochures.
 Simplify and standardise the process of issuance of
exemption certificates.

19.  Avoid introducing tax amnesty schemes
 Create a healthy relationship between stakeholders
in the taxation system viz: FBR and taxpayers
 Government should Focus on Expenditures for social
and economic cause

20. FBR
FBR is regulatory institution for all tax matters and tax
collections in Pakistan

21.  VISION
To be a modern, progressive, effective and credible
organization for optimizing revenue by providing
quality service and promoting compliance with tax
and related laws
 MISSION
Enhance the capability of the tax system to collect
taxes through application of modern techniques,
providing taxpayer assistance and by creating a
motivated, dedicated and satisfied, professional
work force
 VALUES
Integrity – Professionalism – Teamwork – Courtesy –
Fairness – Transparency - Responsiveness

22. Organizational Structure FBR
CCFR
Secretary General/
Chairman
PRAL
Support
Members
Functional
Members
Direct Taxes
Sales Tax &
Federal Excise
Customs
Tax Policy &
Reform
Legal
Administration and
Coordination
HRM
Audit
Fiscal Research
Information
Management System
Facilitation &
Taxpayers Education
Line Members

23. Strengths of FBR
 Contribution towards federal and provincial
total revenue is around 65%
 Revenue collected is sufficient to meet 75% to
80% of Government expenditure needs
 Monitor Fiscal Policy through tax incentives to
encourage flow of FDI

24.  Generation of resources
for smooth economic
management of Federal as
well as Provincial and
Local Governments
 Keeping the economy
vibrant

25. Impact of Tax simplification on FBR
 it improves efficiency level of FBR
 Helps in enforcement of laws
 Increase revenue collection
 Increase confidence level of FBR
 Add more values in economy