Financial Crime World

Pakistan’s FBR Prioritizes Compliance Risk Management to Boost Revenue Collection

The Federal Board of Revenue (FBR) has taken a significant step towards enhancing domestic revenue collection and curbing tax leakages by establishing a Compliance Risk Management (CRM) Directorate.

Overview of the CRM Directorate

Established on November 7, 2022, the CRM Directorate is responsible for identifying compliance risks and suggesting remedial measures to broaden the tax base. Its primary responsibilities include:

  • Developing risk profiles for key segments and sectors related to registration, filing, reporting, and payment compliance
    • Regular updates of a risk register
    • Data collection through an integrated system with FBR’s Information Technology Wing
    • Environmental scanning
    • Research on approved compliance topics

Functions of the CRM Directorate

The directorate will also:

  • Collect risk evaluation reports from field formations
  • Plan risk treatment strategies
  • Develop compliance improvement plans
  • Assist in case selection exercises
  • Measure risk management performance against key indicators
  • Conduct tax gap analysis using scientific tools
  • Operate data analysis centers with the help of data analysts and scientists

Administrative Responsibilities

In addition to its technical responsibilities, the CRM Directorate will:

  • Oversee general administration
  • Manage finance and budget
  • Handle human resources
  • Assign tasks to Inland Revenue field formations
  • Coordinate with other wings and directorates
  • Hire sectoral experts to assist in sectoral studies and risk identification

Impact on Pakistan’s Revenue Collection

The establishment of the CRM Directorate is a significant step towards enhancing Pakistan’s revenue collection capabilities. With its focus on identifying and mitigating compliance risks, the directorate is expected to play a crucial role in broadening the tax base and reducing revenue leakages.

By prioritizing compliance risk management, the FBR aims to boost revenue collection and strengthen Pakistan’s economy. The CRM Directorate will be instrumental in achieving this goal by proactively identifying and addressing potential compliance risks.