Preamble
FBR has prioritized establishment of a Compliance Risk Management (CRM) Directorate as a key area for Domestic Revenue Mobilization. The necessary legal requirement for establishment of Directorate General Compliance Risk Management has been met through Finance Act, 2021, whereby, an amendment has been introduced vide Section 230I of Income Tax Ordinance, 2001 for establishment of Directorate General of Compliance Risk Management. Accordingly, FBR has established a Compliance Risk Management Directorate in Inland Revenue Service on 07 th November, 2022 as a step forward in identification, assessment and prioritization of compliance risks. The Compliance Risk Management Directorate would identify compliance risks and suggest remedial measures to address compliance risks for revenue leakages with focus to broaden the tax base and enhance domestic revenue collection and curb tax leakages.
(a) develop risk profiles on the main segments and sectors related to the four pillar’s of compliance (Registration, Filing, Reporting & Payment) to be included in the risk register. This would be required at least quarterly and annually;
(b) creation and updation of the risk register;
(c) data collection (both internal and external sources) through an integrated system with Information Technology Wing of FBR for the purpose of creation of an indigenous data bank;
(d) environmental scanning, research and studies of approved compliance topics;
(e) collection of risk evaluation reports from risk owners (Field formation) based upon taxpayer’s segments at all four compliance levels (Registration, filing correct reporting, payment and collection) on a quarterly and annual basis and update of risk portal;
(f) collection of third party data;
(g) planning risk treatment/mitigating strategies, developing compliance improvement plan(s), assisting field units in case selection exercise;
(h) periodic measurement of risk management performance against the key risk indicators, risk identification analysis, tax gap analysis through scientific and analytical tools;
(i) operation of data analysis centers by utilizing services of data analysts and data scientists;
(j) development and implementation of CRM policy, frameworks and its practical implementation. Design, develop and maintain the structured CRM methodologies and procedures e.g. design of a risk policy and processes based on CRM framework at FBR;
(k) management of general administration finance, human resources, budget;
(l) to assign any responsibility/function to Inland Revenue field formation;
(m) to coordinate with any of Wing/Directorate General for the purpose of CRM; and
(n) Hiring of sectoral / business experts for assistance in sectoral studies, analysis of business trends and identification of sectoral risks.
