PHOTO: STAR/FILE

STAR BUSINESS REPORT

A panel of the NBR has suggested the introduction of an e-invoicing system to collect value-added tax (VAT) to establish transparency in the collection of the indirect tax, the biggest source of revenue for the state.

“The introduction of digital invoices will help the revenue authority and businesses go paperless,” said the panel in a report submitted to the chairman of the National Board of Revenue (NBR) last week.

“This will enable the establishment of an integrated and transparent platform,” it said.

The implementation of an automated chalan will save time and reduce the scope of human errors. It will also curb fraud in VAT collection and misreporting, the report stated.

The revenue administration, which collects 86 percent of total revenue, formed the 13-member committee at the end of October last year.

It was aimed at strengthening the automation process of the NBR and formulate integrated plans for customs and VAT, which together account for nearly 70 percent of total taxes.

The committee noted that the three wings of the NBR—income tax, VAT, and customs—have separate automated systems. However, the data centres for these systems are set up in different locations.

In the absence of interconnectivity among these systems, complexities arise in the exchange of information, the report stated, urging the establishment of a central data centre.

The NBR panel also suggested the creation of a data warehouse so that all its departments and offices can access information, analyse data, and prepare reports through data mining.

In its submission, the panel recommended integrating all existing online platforms designed to facilitate business and boost the collection of VAT, customs, and income tax to develop a modern and sustainable revenue infrastructure.

To facilitate imports and exports, the committee urged the NBR to introduce an “on-chassis delivery tracking system”, which would significantly reduce risks.

In this regard, the panel cited an “Authorised Economic Operator” (AEO) system launched by the NBR to promote faster trade. Already, 15 firms are operating as AEOs, and a number of applications are under process.

The NBR team stated that steps should be taken to implement the AEO module for the smooth execution of the system.

The panel also suggested the introduction of an electronic cargo “A