CBR to approach Finance Ministry to seek legal support

ISLAMABAD (December 09 2005): The Central Board of Revenue (CBR) will approach the Finance Ministry to seek legal support for smooth implementation of the banking automation system, enabling the taxpayers for online challan deposit services.

A meeting of the State Bank of Pakistan (SBP), National Bank of Pakistan (NBP), Accountant General Office and Central Board of Revenue (CBR) on Thursday decided that the new system would be fully implemented from June 2006. After deadline of June 2006, all the designated branches of the NBP will not accept challans without National Tax Number (NTN) or Computerised Identity Card Numbers (CNIC). Thus, manual accepting/processing of 'challans' and collecting of tax amount would be stopped.

Sources told Business Recorder that it has been agreed to approach the Finance Ministry to give legal cover to this automation project. Under this system, the banks would give a “computer generated payment receipt” to the taxpayer, while the authorised NBP branches would daily transmit revenue figures of tax deposited to the Tax Department.

It is necessary to obtain Finance Ministry's prior approval to amend the relevant rules and regulations for implementation of this scheme. In the meantime, the bank would accept challans manually as well as through “automated system”, the officials maintained.

The representatives of CBR, SBP and NBP also decided that the National Bank would open maximum counters for the taxpayers to deposit income tax challans at the designated branches along with NTN or CNIC on the challans. Secondly, the total number of NBP branches having online facility would be increased from 120 to 300 for automated transmission of tax payment. This would result in 100 percent coverage of indirect taxes and 92 percent coverage of direct taxes under the revenue automation system. The NBP branches would be inter-linked with their head office, which would have online connectivity with the CBR. The CBR will issue a notification to specify the names of more designated NBP branches.

The main benefit of the automation system would be tax facilitation, as the taxpayers would not have to prepare a tax challan and instead would disclose his NTN or CNIC number at the banks' counter. The database provided to the NBP branches contained details of all the taxpayers, which would help the bank staff in quickly retrieving the particulars of the depositors. The bank after receiving the tax will issue a “computer generated payment receipt” to the depositors.

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