The Economic Coordination Committee (ECC) of the Cabinet has approved the restructuring plan for Pakistan Revenue Automation Limited (PRAL), along with the necessary funding for the current fiscal year.
According to sources from the Federal Board of Revenue (FBR), PRAL plays a critical role in supporting the FBR’s revenue automation efforts. It manages functions like digitizing income and sales tax returns, improving citizen engagement, and integrating data with provincial revenue authorities. Despite its importance, PRAL has struggled to keep up with modern technology and operational demands.
The restructuring plan aims to address these challenges and enhance PRAL’s capabilities to support the FBR in improving Pakistan’s tax-to-GDP ratio. Key elements of the plan include:
- Independent Board Appointment: An empowered and independent board has already been appointed.
- Software and Hardware Upgrades: Upgrading PRAL’s software development, maintenance capabilities, and hardware infrastructure.
- Data Analytics Hub: Establishing an analytics hub to improve data-driven decision-making.
- Procurement Improvements: Setting up a procurement cell to streamline technology acquisitions.
- Organizational Reforms: Hiring skilled professionals, offering performance incentives, and improving communication with the FBR.
- Budget and Financial Flow: Streamlining financial mechanisms to improve efficiency in fund allocation.
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The restructuring will require an additional Rs 3.7 billion for the current fiscal year and Rs 4.5 billion annually starting in 2025-26. This is a significant increase from the Rs 1 billion PRAL currently receives annually. The FBR has requested a technical supplementary grant (TSG) of Rs 3.7 billion for 2024-25 and Rs 4.5 billion for the next fiscal year.
The restructuring also includes assessing PRAL’s performance against Key Performance Indicators (KPIs) to ensure better revenue collection and operational efficiency. The FBR has faced some criticism for delays in processing refund claims and applying advance income tax assessments based on the previous year. The Finance Division will review each expenditure request before approving the release of funds.
The ECC approved the funding for the current fiscal year and requested an update on PRAL’s progress in the first quarter of the next fiscal year.
