HISTORY OF CBR

HISTORY OF FBR
PRIMARY REASONS FOR CONVERTING CBR
INTO 'FBR'
FEDERAL BOARD OF REVENUE
POWERS AND FUNCITONS OF 'FBR'
 POWER TO COLLECT REVENUE.
 BUDGET ALLOCATION.
 ANNUAL REPORT.
 HUMAN RESOURCE MANAGEMENT.
 ESTABLISHMENT AND MAINTENANCE OF COMPANIES
OR SUBSIDIARIES.
 EMPLOYEES WELFARE FUND.
 REPRESENTATION BY PUBLIC.
 RULES AND REGULATIONS.
 ASSISTANCE TO THE BOARD.
 STATUS OF EXISTING AGREEMENTS WITH CBR.
HISTORY

The Central Board of Revenue was created on April 01, 1924 through the
Central Board of Revenue Act, 1924.

In 1944, a full fledged Revenue Division was created under the Ministry of
Finance. After independence, this arrangement continued upto 31st August,
1960 when on the recommendations of the Administrative Re-organization
Committee, CBR was made an attached department of then Ministry of Finance.
In 1974, further changes were made to streamline the organization and its
functions. Consequently, the post of Chairman CBR, wascreated with the status
of ex-officio Additional Secretary and Secretary Finance was relieved of his
duties In order to remove impediments in the exercise of administrative powers
of a Secretary to the Government and effective formulation and implementation
of fiscal policy measures, it was decided to restore the status of the CBR as a
Division under the Ministry of Finance.
 Thus, Revenue Division was re-created on October 22, 1991. This experiment
continued for a short period. In January, 1995, Revenue Division was abolished
and CBR reverted back to the pre-1991 position. However, from December 01,
1998, Revenue Division was once again re-created and it continues to exist as
such.

HISTORY OF FBR:
On July 15 2006, the government has decided to convert the Central Board of
Revenue (CBR) into an independent entity as 'Federal Board of Revenue'
(FBR),
enhancing its financial and operational autonomy for smooth functioning, with
additional powers to take decisions on taxation/reforms related matters,
and to authorize it to demand taxpayer's related information from any
department/bank/financial institution/housing society to maintain a 'national
database'.
The CBR has drafted 'Federal Board of Revenue (FBR) Act, 2006' which would
repeal the 'Central Board of Revenue (CBR) Act, 1924'.
The 'FBR Act' set up an 'Advisory Board' comprising Minister of Finance or
Advisor to Prime Minister on Finance and Revenue; Chairman CBR and three
other members from the public/private sector.
The 'Advisory Board' was a supervisory body to monitor the functioning of
'FBR' and independently make annual budget allocations.

PRIMARY REASONS FOR CONVERTING CBR

INTO 'FBR'
1 Through independent board legal sanctity was given to ongoing
reform process.
2. TO operational and administrative autonomy of the CBR.
3. to take decisions with minimum interference from the Ministry of
Finance.
4. To meet human resource management (HRM) requirements needed for the
reformed units.
5. to help in meeting the international obligations under bilateral
treaties/implement international regulatory frameworks.
6. to meet the requirements of CBR's vision and mission to make it a modern
tax-friendly organization.
7. to give protection to the taxation structure/tax administration under the
reform agenda.
8. to collect taxpayer's information from any government department for
compiling a 'national database'
9. to set up an 'employee’s welfare fund' with an initial capital of Rs 500
million.

To create database to ensure proper charge, levy and imposition of taxes,

duties, fee, additional tax and surcharges to achieve fair
distribution of burden of taxes. The information collected in the database is kept
confidential and be disclosed except for purposes authorized by or
under any law.

According to the draft 'FBR Act 2006', the CBR continue to operate, without
interruption, as 'Federal Board of Revenue' and regulate

fiscal, investment and policy matters; administration management, imposition

and collection of Federal taxes,duties, levies, on national level

FEDERAL BOARD OF REVENUE':

chairman for tenure of 3 years, which may be extended on eligibility for
another 3 years. The chairman shall be the chief executive officer of the 'Board'
and shall, together with other members, be responsible for
administration of the affairs of the Board.
POWERS AND FUNCITONS OF 'FBR':
to prepare, with the advice of the Advisory Board , the revenue expenditure
budget for each financial year.
responsible for the regulation, administration, assessment and collection of
taxes,

The 'Board' may in consultation with the Advisory Board, calculate taxes and
duties, adopt streams of taxes and duties and/or make it identifiable as inland
revenue and customs duties, or internal taxes and duties.
It will identify matters to make policy decisions and may also make
recommendations
regarding policy to the federal government for its consideration. The 'Board'
may adopt best international practices followed in other countries for improving
collecting of duties/taxes.

Powers and functions of the Board:

The Board shall exercise powers and perform all such functions that are
necessary to achieve the
objects and purposes of this Act and include the following, namely:
(i) To implement the tax administration reforms;
(ii) To promote voluntary tax compliance and to make the Board a service
oriented organization, and to implement comprehensive policies and programs
for the education and facilitation of taxpayers, stakeholders and employees, etc.,
in order to develop the Board into a modern efficient authority.
(iii) To improve the productivity through a comprehensive and effective human
resource strategy.
(iv)To identify and select through Internal Job Posting process the employees
for designated jobs.
(v) To grant additional allowances or any other incentives and rewards to the
employees and members of the Board.
(vi)To take appropriate measures including internal controls to combat
corruption within the organizations under the Board and provide checks to
ensure the integrity of employees
(vii) To re-designate existing posts within its jurisdiction, prepare job
description of any post and create posts in accordance with the rules.
(viii) to direct or advise, where necessary, investigation or inquiry into
suspected duty tax evasion, tax and commercial fraud, money-laundering,
financial crimes cases and to coordinate with the relevant law enforcement
agencies.
(ix)To introduce and maintain a system of accountability of performance,
competence and conduct of the employees.
(x) To implement international obligations pursuant to a treaty, resolution or any
international commitment.
(xi)To establish a foundation for the welfare of the present and retired
employees and their families, and to create, establish, organize, and assist in the
social and cultural facilities.
(xii) To create a surplus pool of employees as and when required.
(xiii) To make regulations, policies, programs, strategies in order to carry out
the purposes of this Act.
(xiv) To engage any person or entity on contract basis to carry out assignments
or for the consultancy in accordance with the rules of the Federal Government.
(xv) To regulate and enter into any agreement, contract, understanding, with any
international organization or institution or donor agency or counterpart entity
with approval of the Federal Government.
(xvi) To create field formations of Board for greater efficiency in
implementation of fiscal laws and refer to them with appropriate titles.
(xvii) To set up mechanism and processes that facilitate removal of grievances
and complaints of the tax payers.
(xviii) To carry out any other function, activity and acts, etc., as decided and
determined by the Board.
(xix) To perform any other functions entrusted from time to time by the Federal
Government.
 POWER TO COLLECT REVENUE:
The 'Board' may, from time to time, and with the approval of the federal
government, collect revenue from sources within Pakistan or from abroad as the
case may be, as envisaged in the various legislation to the extent applicable.

HUMAN RESOURCE MANAGEMENT:

The 'Board' may, with the approval of Advisory Board, formulate human
resources development and management policies which may include career
planning, evaluation for retention in service, and other job and service related
matters
 ASSISTANCE TO THE BOARD:
The federal divisions, attached departments, wings, offices, corporations and all
the provincial government departments, attached departments, shall assist the
'Federal Board of Revenue' to carry out its functions smoothly.
Vision:
To be a Modern, Progressive, Effective, Autonomous 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 due taxes through application
of modern techniques, providing taxpayer assistance and by creating a
motivated, satisfied, dedicated and professional workforce.
FBR’s Values:
Integrity
Professionalism
Teamwork
Courtesy
Fairness
Transparency
Responsiveness
Official structure
Collector ate of Sales Tax
Officers in collector ate were as follow:
Collector
Additional collector
Deputy collector
Assistant collector
Superintendent
Deputy Superintendent
Auditor
Lower Staff

purpose of managing law & order, revenue, collection, taxation, the control of
planning permission and the handling of natural and man-made emergencies. A
collector was a crucially important colonial officer placed at the district level
and entrusted with the responsibility of revenue collection and other civil duties.
Departments in Collector ate were as follow:
Local Registration office (LRO)
Audit
Adjudication
Refund

Officers of Income Tax were as follow:

Regional commissioner.
Commissioner.
Additional commissioner.
Deputy Commissioner.
Assistant commissioner.
Income Tax
Special Officer.
Special Officer.
Inspector.
Lower Staff.
Offices of Income Tax were as follows:
Regional Commissioner Office (R.C)
Zonal Office (Commissioner)
Range (Additional Commissioner)
Circle (DC, AC, ITO & SO)

FBR is divided into further categories

Customs
Inland Revenue services
Customs:
Pakistan Customs is the guardian of Pakistan borders against movement of
contra band goods. It provides a major source of revenue to the Government of
Pakistan in the form of taxes levied on the goods traded across the borders. It
also helps to protect the domestic industry, discourage consumptions of luxury
goods and stimulate development in the under -developed areas.
Inland Revenue services
This service group is responsible for carrying out the functions relating to
Income Tax
Sales Tax
Federal Excise

Current structure of appellate tribunal:

In the new system there is one Commissioner (Appeals) in all cases of income
tax, Sales tax and Federal Excise. The new system includes three members
Chairperson, Judicial members and Accountant members in all cases of income
tax, sales tax and federal excise.

Explain the suggestions given by the tax authorities and other persons to
improve this system.
SUGGESTIONS GIVEN BY THE TAX AUTHORITIES AND other
persons to improve this system:
 Federal Board of Revenue should conduct training for all officers to
understand all department works.
The success of an organization like FBR crucially depends on how well it
serves the interests of the wide spectrum of its stakeholders.
Develop a system with key features of universal self-assessment with
selective audit, centralized information system.
Simplify and standardize the process of issuing exemptions certificate. The
Federal board of revenue has to secure the interests of government and its own
employees.
Taxpayer’s Assistance Units must be developed as a point of contact
between department and the taxpayers.
The revenue organization must develop support systems for audit and
standardize audit work.
A tax payer should not be audited for more than once a year. Compulsory
registration process should be made more systematic.
Taxpayers must be more educated about the procedures, practices and
methods of record keeping by publishing Booklets and brochures.
The system of recruitment, training, performance evaluation, separation
and accountability should be improved.
The employees of FBR who perform well, should be promoted.
Tax Amnesty Schemes should not be introduced.
Implement NTN as a common tax number on a priority basis to harmonies
documentary requirements and lower the manpower usage in registration across
taxes.
Government of Pakistan should create an enabling environment through
legal changes autonomy and effective supervision so as to improve its efficiency
and integrity.
Risk Management Techniques should be applied to identify high risks.
Business processes concerning imports and exports should be improved.
There is need of reorganize the pay scales of the employees of FBR.
The information system should be kept updated continuously which could
address the matters concerning automation of organization’s processes and
could generate databases.

Problems and Hurdles with tax advisors and authorities search

Head of Board (Chairman):
In existing setup, the chairman FBR being the executive head of the board as
well as secretary of
the revenue Division has the following responsibilities.
I. Formulation and administration of fiscal policy.
II. Levy and collection of federal taxes.
III. Judicial function of hearing of appeals.
His responsibilities also involves interaction with the offices of the president,
the prime minister,
all economic ministers as well as trade and industry.
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