Page 43 - CMA Journal (Nov-Dec 2024)

Focus Section

b) AI-Powered Audits: Utilize AI to analyze spending
patterns and flag suspicious transactions. For
instance, India’s GSTN uses AI to flag 15,000
suspicious transactions monthly, and Pakistan could
replicate this approach to curb evasion in sectors like
wholesale trade.
c) Blockchain Trials: Implement blockchain-based
invoicing in the textile sector, where $5 billion worth
of exports go underreported annually.

d) Leveraging Mobile Penetration: Introduce toll-free
codes (e.g., 9999) for farmers and rural SMEs to file
returns offline, similar to Kenya’s iTax system.
e) GDPR-Style Laws: Mandate taxpayer data
encryption and impose penalties for breaches. The What Still Needs to Be Done?
EU’s GDPR led to a 30% decline in data breaches •
post-implementation. Expand Track and Trace: Include pharmaceuticals
(20% underreported sales) and textiles ($5 billion
f) Public-Private Partnerships: Collaborate with PTCL export under-invoicing).
and Cybernet to upgrade FBR’s IT infrastructure.
• Deploy IoT Sensors: Use smart sensors to track
(2) Global Collaboration production volumes in manufacturing units.
• Boost AI Audits: Train FBR staff in AI tools and
a) IMF/World Bank Funding: Secure grants for rural
e-filing kiosks, inspired by Bangladesh’s Digital Haats partner with firms like IBM to develop custom
initiative, which brought 2 million farmers into the algorithms.
tax net. • Simplify Tax Filing: Launch a Unified Tax Portal
merging income, sales, and federal/provincial taxes.
b) OECD Standards: Implement AI ethics frameworks
to mitigate algorithmic bias, following South Africa’s • Establish Digital Tax Kiosks: Set up 1,000 digital tax
audit reforms. kiosks in villages by 2025, providing free e-filing
Has Pakistan Achieved its Tax Automation Goals? assistance.
Tax automation is not just a technological upgrade but a
Progress:
socioeconomic necessity for Pakistan. By leveraging AI,
• Track and Trace: Generated PKR 200 billion in blockchain, and mobile solutions, Pakistan could
potentially double its tax-to-GDP ratio to 18% by
additional revenue from the tobacco and cement
2030—unlocking critical funds for infrastructure and
sectors since 2021.
social programs. However, success depends on
• PRISM: Reduced sales tax leakage by PKR 75 billion overcoming challenges such as digital literacy,
in 2023 through real-time retailer data. cybersecurity, and SME inclusion. Learning from global
models while adapting solutions to local contexts will be
• Digital Collections: Hit PKR 1.2 trillion in 2023,
critical. For instance, combining India’s GSTN efficiency
primarily driven by corporate taxpayers.
with Brazil’s blockchain transparency could establish
Shortcomings: Pakistan as a regional leader in tax innovation.The road
ahead is challenging, but with strategic investments and
• Only 5% of SMEs use digital tools, compared to 40% collaboration, Pakistan can transform its tax system into a
in India. pillar of economic resilience.
• The FBR lacks a dedicated cybersecurity team, About the Author: Mr. Muhammad Ammad Ansari is an Associate
Member of ICMA International and currently serves as the Manager
posing a risk for future breaches.
of Litigation and Audit at Sui Southern Gas Company Limited
• Pakistan has achieved 40–50% of its automation (SSGCL) in Karachi. Prior to this, he held the position of In-Charge of
Taxation at the Utility Stores Corporation of Pakistan. With over 17
goals, with major gaps in SME integration and
years of extensive experience in tax operations and litigation in
sectoral coverage. Pakistan, he brings a wealth of knowledge to his current role.

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