ISLAMABAD, Jan 11: Federal Finance Minister Dr Abdul Hafeez Shaikh has approved the creation of a Fiscal Policy Board and directed the Federal Board of Revenue to take necessary measures in this regard.

The minister, while hearing the Tax Reform Coordination Group (TRCG), who presented recommendations for increasing the government revenue here on Tuesday, stated that the fiscal policy board will thoroughly discuss the fiscal policy issues.

The creation of FPB was recommended by the Income Tax sub-group led by Vakil Ahmad Khan.

FBR Chairman Salman Siddique informed the group that FBR was in the process of broadening its tax base by identifying potential taxpayers utilising data available with Nadra.

The Customs sub-group led by Ahmed Waqar presented recommendations relating to administrative issues, certain infrastructure measures and human capacity building.

It was decided that a valuation committee will be constituted, which would include the FBR, SBP governor, ministry of commerce and stakeholders from the private sector. It would suggest measures to deal with mis-declaration and under-invoicing on the basis of reliable valuation data.

The TRC group also decided that FBR chairman would look into improving equipment support for preventing smuggling such as scanners, weigh-bridges and tracking systems as well as developing integrity and human capacity.

The Sales Tax and Federal Excise sub-group led by former FBR chairman Abdullah Yousuf recommended improving the systems and procedures for implementing an automated tax management system, creation of a data warehouse, and reducing the tax gap.

The group was of the view that the tax gap was the difference between the tax potential and the tax being collected. It is a misconceived notion that the tax gap is the corruption in FBR, the sub-group claims.

During the deliberations the FBR presented key achievements in terms of sales tax refunds, and informed the meeting that the Expeditious Refund System (ERS) has been further refined to clear portion of the claims for which Goods Declaration have been cross-matched.

Further, the system will be re-run periodically to clear any remaining process of the claim.

The FBR also informed the meeting that since the centralised cheque issuing system from Sept 22, a total of 22,734 cheques amounting to Rs14.2 billion have been issued compared to 6,172 cheques amounting to Rs4.4 billion issued in the same period last year.

The meeting of the Tax Reform Coordination Group was attended by Minister of State for Finance and Revenue Hina Rabbai Khar, Deputy Chairman Planning Commission Nadeem-ul-Haque, and other officials.