Islamabad, Jan 27: The Federal Board of Revenue (FBR) has defended its controversial procurement of 1,010 Honda City cars, worth Rs. 6 billion, for its revenue officers, emphasizing that the vehicles are intended to aid in the collection of taxes and improve fieldwork efficiency.
In an official response to the Senate Standing Committee on Finance and Revenue, the FBR clarified that the vehicles are specifically for field officers in grades 17 and 18, with the primary aim of enhancing their ability to carry out on-site audits and physical verification of tax processes. The vehicles, which will be equipped with tracking systems and branded with FBR stickers, will not be allocated to supervisory officers in grades 19 and above, nor to headquarters staff. This, the FBR said, would ensure there is no misuse of the vehicles.
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The FBR stressed that the new cars would play a critical role in bridging the Rs. 600 billion tax gap from the previous fiscal year, with a substantial portion of this gap Rs. 350 billion coming from uncollected sales tax. The agency highlighted the challenges it faces in a country where only 42,000 manufacturers out of 260,000 are registered, and just 3 million citizens file income tax returns. Given the limited progress in digitalization, the FBR argued that physical enforcement and outreach through fieldwork remain essential to improving compliance.
The FBR also pointed out that mobilizing staff to remote locations, such as sugar mills and other industrial areas, has been a persistent challenge due to a lack of proper transport. These vehicles are expected to address this issue, reducing the need for revenue officers to rely on factory owners for transportation. The FBR noted that enhanced monitoring in industries like sugar, cement, fertilizer, and tobacco has already led to the collection of Rs. 250 billion in tax revenue, and the new vehicles would further strengthen these efforts.
The newly procured cars come with several high-end features, including navigation systems, reverse cameras, four-year extended warranties, and free maintenance services. Despite criticisms surrounding the cost, the FBR maintains that this investment is necessary to boost tax collection and support the country’s ongoing recovery.
