Pakistan Tax Administration Reforms Project

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The development objective of the Tax administration Reform Project is to fundamentally reform the Central Board of Revenue (CBR), for a more efficient and effective revenue administration system. The project aims to promote voluntary compliance, increase the overall collection result, and guarantee fairer and more equitable application of tax laws. Additionally, the new human resource policy framework and management system, combined with modernized procedures, and institutional structure will lead to an increase in transparency, and integrity of the tax administration operations. The project aims to strengthen tax administration to contribute to the achievement of fiscal targets, and facilitate the collection of optimum tax revenues. Project components are: 1) Management and institutional development, to support and enhance the broader tax reform strategy by driving: strategic changes within CBR's organizational structure; the transformation of the organization's culture and ethos; and, the development of sound people-management policies and procedures. 2) Human resources development, includes developing an overall Human Resource Management strategy, towards developing a workforce rationalization strategy, and implementation plan to reflect the rollout of a new functional organization. This will include an employee contingency fund and redeployment, and the development of a performance evaluation system, based on transparent criteria, towards an incentive structure, supported by staff training, and the required capacity building. 3) Improving revenue operations will support extensive strategies and initiatives to transform the administrations of the CBR's three revenue streams: Direct Tax, Sales Tax, and Central Excise; and Customs - a) from pure enforcement, to a risk-based self-assessment systems based on voluntary compliance of taxpayers; and, b) from a mix of organization structures of the three streams, to consistent ones, functionally-based, automated, and decentralized. 4) Strengthening revenue services entails the establishment of a Tax Audit function, as a separate functional stream. 5) Creating a tax compliant culture, through taxpayer education and facilitation, a communications program, computerization, and appropriate registration systems. 6) Adopting responsive information technology (IT) systems, to move from a highly manual to an automated environment. 7) Infrastructure upgrading and development, will focus on the improvement of work spaces, equipment and supplies.