FBR’s erratic ARC a cause of problem for taxpayers
Automated Revenue Collection (ARC) is ‘Pain in the Neck’
Date: April 04, 2014
Federal Board of Revenue’s (FBR’s) automated revenue collection (ARC) is ‘pain in the neck’,
creating hurdles instead of facilitating the tax payers. The existing system being implemented by
the FBR in collaboration with Pakistan Revenue Automation Private Limited (PRAL) is not
delivering the results as there are many discrepancies which the industrialists face every day.
In the case of adjustment of sales tax that importers and businessmen pay during the import
stage, they are showered with a lot of obstacles in its proceedings. The FBR had revised the
automated revenue collection system (PRAL) without any proper planning.
Ismail Suttar, President Lasbela Chamber of Commerce and Industry (LCCI) has come out in a
strong statement urging the FBR to immediately take up the matter with PRAL to update the
automated revenue service in order to remove the difficulties of the manufacturing industries to
get the adjustment of sales tax they paid at the import stage. Many importers and businesses have
been facing unnecessary hurdles in getting the adjustment of sales tax since July 2013 when the
abrupt revision of PRAL system was enforced, as FBR implements the automated system
He suggested the FBR not to make abrupt and arbitrary changes in PRAL system for
manufacturing industries, without knowing its consequences in order to cover its own
weaknesses in enhancing the revenue collection. The LCCI President further clarified that many
industries have to pay customs duty, income tax and sales tax on manual challans at the import
stage due to the limitations of automated system. These payments are received by the Customs
authorities after due vetting and clearance of goods at the import stage. However, the same are
not being allowed to be adjusted in the system which is usually done in the monthly sales tax
returns filed by the industries.
He said that a similar issue was faced by the industry regarding the federal excise duty (FED)
adjustment on oil imports. The industry had to run pillar to post to get that adjusted. After many
months of efforts, the FBR allowed it for the industry. However, the system was not upgraded to
allow all industries to claim the rightful adjustments and therefore many industries are suffering
from the inefficiency and indecision of FBR authorities.
Ismail Suttar was very much concerned about this state of affairs as during these days of
economic hardship and slow economic growth, the FBR is not able to facilitate the
manufacturing industrial sector which is the engine of economic growth. The manufacturing
industrial sector not only contributes positively towards economic growth but also provides
employment to a large number of people. “It is not desirable that this sector suffers and makes
appeals to the authorities for claiming the tax adjustments”. This situation sends a negative
message for the industrial development in the country.
Ismail Suttar said that it is a matter of great concern that the affected persons have been
communicating with the relevant RTOs, PRAL, and Customs authorities regarding the issue,
who agree that this should be done but none of the agencies are taking necessary steps to update
the system. Keeping in view the importance and urgency of the matter, the LCCI chief urged the
inland revenue department of the FBR and the PRAL to work together in order to find a solution
to resolve the problems in getting the sales tax adjustments by the manufacturing industrial
sector, who are being penalised for no reason.