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JINNAH

UNIVERSITY FOR WOMEN


DEPARTMENT OF COMMERCE
B.S PART 2
SEC A
SUBMITTED TO

MA`AM FAIZA

SUBMITTED BY

ANUM KHAN
ERMA SALEEM
NIMRAH AHMED
NOORULAIN

DATED: November , 2008


We would like to thanks ALL MIGHTY ALLAH and present our
gratitude to MA’AM FAIZA who acts as a source of encouragement
with her guidance and supervision towards this report.
We hope the present efforts will live up through the

Expectations of all who have invested time,

efforts and prayers in making it possible..

WEBSITES:
www.google.com
www.fbr.gov.pk
www.cbr.gov.pk

THANKS.

• 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 OF CBR:
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 the
Ministry of Finance. In 1974, further changes were made to streamline the
organization and its functions. Consequently, the post of Chairman CBR, was
created with the status of ex-officio Additional Secretary and Secretary Finance
was relieved of his duties as ex-officio Chairman of the Board.

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 would have
provisions to override any other government law.

The 'FBR Act' would 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' would be a
supervisory body to monitor the functioning of 'FBR' and independently make
annual budget allocations.

• FOLLOWING ARE THE PRIMARY


REASONS FOR CONVERTING CBR INTO
'FBR':
1. the independent board would give legal sanctity to the ongoing
reform process.
2. It will enhance operational and administrative autonomy of the CBR.

3. The 'Board' will take decisions with minimum interference from the Ministry of
Finance.

4. It will meet human resource management (HRM) requirements needed for the
reformed units.

5. It will help in meeting the international obligations under bilateral


treaties/implement international regulatory frameworks.

6. The 'FBR' will meet the requirements of CBR's vision and mission to make it a
modern tax-friendly organization.

7. It will give protection to the taxation structure/tax administration under the


reform agenda.
8. It would collect taxpayer's information from any government department for
compiling a 'national database'

9. It will set up an 'employee’s welfare fund' with an initial capital of Rs 500


million.

10. The 'Federal Board of Revenue Act, 2006' will have provisions to override all
other government laws.

The
'Federal Board of Revenue' would 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 would be
kept confidential and would not be disclosed except for purposes authorized by or
under any law.
The 'Board' would have the powers to implement through administrative, legislative
or enforcement measures international commitments and obligations on the
Government of Pakistan under bilateral treaties, multilateral treaties, applicable
resolutions of international organizations, proposal of professional bodies etc. It
would comply with international regulatory frameworks, safety measures etc as
recommended by international bodies.

According to the draft 'FBR Act 2006', the CBR would 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 and for connected or ancillary matters.

• FEDERAL BOARD OF REVENUE':


The draft stated that the 'Federal Board of Revenue' shall continue to operate
without interruption. The head office of the 'Board' shall be
in Islamabad. The 'Board' may establish and close down
offices, re-locate the offices according to the stream of the
taxes, at other places in Pakistan.

The federal government would appoint any suitable person


as its 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':


The 'Board' shall have all necessary powers as may be
necessary to perform its duties and functions under 'FBR Act
2006'. It will prepare, with the advice of the Advisory Board,
the revenue expenditure budget for each financial year.

The 'FBR Board' shall be responsible for the regulation,


administration, assessment and collection of taxes, whether
federal or provincial, if so provided by law. It will be
empowered to conduct research and frame a code of conduct
for employees to enforce accountability.

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.

 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.

 BUDGET ALLOCATION:
The Ministry of Finance will provide budget
for revenue and/or current expenditure and
lump sum funds, based on the requirement of
the 'Board' to achieve its goals and targets. The
'Board' shall frame financial rules and
implement the same on approval of the
Finance Division.

 ANNUAL REPORT:
Within 90 days before the end of each fiscal year, the 'Board' shall
prepare a report on its activities including investigations/inquiries and
release it to the general public. The 'Board' shall, within 120 days
before the end of each financial year, send the statement of accounts
and its annual report to the Parliament.

 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
like posting with the companies or trust formed by the 'Board'.

The 'Board' will prescribe selection criteria of employees for


postings and transfers in general, and for postings against
positions where additional allowances or pay is allowed on
regular basis.

It will be empowered to appoint non-service persons having the requisite


standards of honesty, integrity and skill in business administration, economics,
business law, taxation, accountancy and management information system.
Besides other powers, it can ask the CBR employees to disclose the assets owned
directly or indirectly by them or their family members.

 ESTABLISHMENT AND MAINTENANCE OF COMPANIES


OR SUBSIDIARIES
The 'Board' may on need basis, get incorporated and
maintain companies for training needs of the 'Board' and
its employees, the field offices, organizations or institutions
or for the stakeholders; research and development in the
relevant fields; campaign to create, awareness and to
educate the taxpayers; upgrade skills of the employees and
automation purposes. It may transfer or post or place any
of its employees to work for the company.

The management of such companies will be with the serving or retired members
or officers of the 'Board'.

The CEO will be appointed from senior serving or retired officer with suitable
qualification. The company will have principal office at Islamabad and branch
office at Karachi. A committee of the members of the 'Board' shall supervise the
functions of such companies.

 EMPLOYEES WELFARE FUND:


A fund called, 'FBR Employees Fund' will be set up for the welfare of 'Board'
employees. The fund will be launched with an initial
contribution of Rs 500 million. It will also get contribution
from the employees of the 'Board' and federal government.

The fund will also collect a certain percentage of tax on


concealed income, amount realized from sale or additional
levies on confiscated goods, proceeds of auctions in
recovery proceedings.

The fund will meet medical, transport and education and other welfare expenses,
and also arrange recreational activities for the officers, employees and their
families.

 REPRESENTATION BY PUBLIC:
Any person, organization or entity may make a representation to the
'Board' to point out any anomaly, tariff discrepancy, interpretation
etc under relevant legislation. They may make a representation
against any hardship or delay relating to the tax matters.

The 'Chairman' shall have the powers to issue orders keeping in view the
taxpayer's grievances.
 RULES AND REGULATIONS:
The Federal Government may, by notification in the official Gazette, make rules
for all or any of the matters in respect of which it is required
to make rules to carry out the purposes of the 'FBR Act
2006'. It will be empowered to make rules in the matters
relating to the imposition and levy of taxes, duties, and
procedures.

This shall be subject to the condition of previous publication


and before making any rules the draft shall be published in
the official Gazette for eliciting public opinion within a
period of 30 days from the date of publication.

 ASSISTANCE TO THE BOARD:


The federal divisions, attached departments, wings, offices,
corporations and all the provincial government departments,
attached departments, wings and FATA, NA administrations
shall assist the 'Federal Board of Revenue' to carry out its
functions smoothly.

 STATUS OF EXISTING AGREEMENTS WITH CBR:


All existing contracts and agreements made by CBR
would continue even after promulgation of the 'FBR Act,
2006' and rules/regulations/SROs issued/adopted by
CBR would remain intact.

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