Competitiveness Support Fund provides technical assistance to 50 senior and mid-level FBR management officials
The Federal Board of Revenue received in-depth training on the financial reporting, taxpayer audit, revenue analysis and tax policy capacity. As a result of these trainings FBR will implement new ITMS and use a data warehouse for more effective and efficient tax collection for FY 2012 and onwards.
The Government of Pakistan realized the need for such an intervention, when the country was unable to send correct data and assessment on its financial forecasting and reporting to international institutions, which raised doubts among the bilateral and multilateral agencies.
The U.S. Agency for International Development/Pakistan (USAID) proposed to initiate and finance a collaborative tax administration program (TAP) with the Federal Board of Revenue (FBR) of the Government of Pakistan (GoP). The objective of the program was to provide assistance, to build FBR capacity and to transform the FBR into a more transparent, efficient, accountable public sector organization, with enhanced capacity for service delivery. To conduct TAP’s review, the Competitiveness Support Fund (CSF) designed a training programme in a manner that built the capacity of the FBR officials on real time data. It established a team consisting of experts like Mr. Muhammad Abdullah Yusuf, Dr. Ather Maqsood Ahmed and Mr. Habib Fakhruddin, and Mr. Edward Koos along with Dr. Ashfaq Hassan.
The trainees had hands on experience in managing and implementing analytical financial systems using state of the art tools. The trainees were also equipped with the knowledge of operating the new information technology management systems at FBR.
In a statement, Shahab Khawaja, the Chief Executive Officer of the Competitiveness Support Fund said that “Pakistan needs to put in a more transparent and effective system in tax collection and the timeframe to pay taxes – therefore, expanding tax base by improving compliance, bringing the currently untaxed areas into the tax system and formalizing almost 40% of Pakistan’s informal economy have been the keys areas of our focus of this capacity building initiative”.
He also added“50 senior to mid-level management officials were trained to promote a culture of informed decision-making and policy formulation by strengthening the automation and research capacity of the FBR for maximum efficiency and transparency of systems and processes. The training program is also building up capacity for better revenue forecasting.”
CSF as a partner institute of the World Economic Forum (WEF) has identified key economic challenge related to taxation issues in The Financial Development Report 2010 and the Financial Development Index (FDI). According to these reports, Pakistan was ranked at 54 among 57 economies, losing 6 points from its previous position of 49 in 2009. However Pakistan does well on the distortive effect of taxes and subsidies on competition, where it has been ranked at 38 out of 57 economies.
Former Chairman FBR and the Lead Consultant for the training programme, Muhammad Abdullah Yusuf said, “Pakistan needs to focus on improving the financial reporting gaps, CSF has provided technical assistance to FBR and other institutions of the Government of Pakistan on key focus areas including taxpayer education and public outreach, information technology and management systems and data warehouse, taxpayer audit with revenue analysis and tax policy capacity.”
CSF has worked on assessing the current FBR tax administration functions and identified areas where reforms were needed; it also reviewed the current and past tax technical assistance projects and identified any gaps in assistance provided to the FBR. CSF also designed a work-plan that sets forth specific tasks to be performed within each proposed area of assistance.
CSF is based on international best practices (India, Thailand, Turkey, Ireland, Finland etc.) to strengthen and make the private sector more competitive and to improve the policy framework needed for innovation-based competitiveness. USAID has been providing financial support to CSF for carrying out its activities. The Competitiveness Support Fund is supporting Pakistan’s goal of a more competitive economy by providing input into policy decisions, working to improve regulatory and administrative frameworks and enhancing public-private partnerships within the country.
CSF is also providing technical assistance and co-financing for initiatives related to entrepreneurship, business incubators and private-sector led initiatives with research institutes and universities that contribute to creating a knowledge-driven economy. CSF activities are helping all producers along the value chain that contribute to ultimate product quality. By obtaining better value and better prices for quality products, and improving cooperation throughout the Pakistani economy, the CSF is contributing to poverty alleviation by providing more income for producers and better employment prospects for employees.