Back in 1969, Lawrence J. Peter created a cultural phenomenon with his brilliant, outrageous, hilarious, and all-too-true treatise on business and life, The Peter Principle — and his words and theories are as true today as they were then. By posing — and answering — the eternal question, “Why do things always go wrong?” Peter explores the incompetence that runs so rampant through our society, our workplace, and our world in an outrageously funny yet honest and eye-opening manner. The current fiscal year, about to end in 20 days, will not be the first or last in which the Federal Board of Revenue (FBR) fails to meet the revised-collection target even after blocking refunds of billions of rupees and taking huge amounts from large business houses as advance payments not related to the collection period. It has become a chronic and recurrent problem, like the debt trap. The result of shortfall vis-à-vis original target fixed for FBR will further widening of fiscal deficit that is expected to cross Rs 2 trillion. For fiscal year 2017-18, the target for FBR was originally fixed at Rs 4.013 trillion. However, just like every year, it was revised downwards to Rs 3.935 trillion. In the first eleven months, FBR provisionally collected Rs 3.27 trillion. It needs to collect Rs. 661 billion during this month. This goal can be achieved if two amnesties schemes — for undeclared foreign and domestic assets/incomes — are substantially availed. The lukewarm response to these schemes so far is due to FBR’s hesitation to clarify the questions posed by citizens and tax professionals regarding many grey areas and poor drafting, which are vulnerable to many interpretations and confusions. The main reliance of FBR since 1991-92 has been on indirect taxes, even under the Income Tax Ordinance, 2001 which contains over 50 withholding tax provisions. The total revenue collection by FBR in 2016-17 was Rs. 3368 billion. It missed the original target by a wide margin of Rs 250 billion. The current fiscal year, about to end in 20 days, will not be the first or last in which the FBR fails to meet the revised-collection target even after blocking refunds of billions of rupees and taking huge amounts from large business houses as advance payments In 2015-16, FBR, despite imposing additional taxes of Rs 360 billion, allegedly blocking over Rs 220 billion refunds and taking Rs 30 billion as advance failed to meet the third-time revised target showing shortfall of Rs 222 billion vis-à-vis original target of Rs 2810 billion, which was first reduced to Rs 2691 billion and then to Rs 2605 billion. FBR has a long history of overstating revenue collections by manipulating the figures, blocking bonafide refunds and taking advance payments from banks and other large taxpayers. Way back in 1999, tax bureaucrats inflicted shame on the country by gross misreporting of data to the IMF. Subsequently, a commitment was made to the IMF to review fiscal data from financial year 1989-90 onwards. The data compiled for financial years 1994 to 2000 confirmed that tax revenues were inflated by billions of rupees. The tax collectors — data manipulators is a more appropriate term for them — showed higher tax collections through fudging of figures and the nation had to pay a heavy cost for it (not only in terms of fine paid to the IMF) but further tarnishing the image of the country in the international community that nothing is transparent here. The persistent manipulation of revenue collection figures by FBR is a serious, but neglected matter. Time and again independent analysts and foreign institutions have expressed their indignation over this malpractice, but the successive governments have never ordered any inquiry into the matter. Never ever has FBR disclosed in its collection statements how much undisputed and established refunds remained unpaid on the closing date of the fiscal year, which must be subtracted from the gross revenue receipts to portray the correct net revenue collection. It only mentions the actual refunds issued, whereas accrued and ascertainable liability of refunds should also be taken into account to reflect the true picture of net revenue realised during a financial year. It is strange that star Finance Minister of PML-N, now a fugitive, being a foreign qualified chartered accountant, has been ignoring this established norm of accounting. Thus, the acts of deceit, manipulation, fraud and highhandedness by FBR testify to the criminal culpability of political masters as well. It is shocking that FBR has failed to publish the Yearly Book for 2016-17 even after lapse of nearly a year now. What are they afraid of? Of course, it will help highlight the jugglery of figures and reveal quantum of refunds blocked, as well as expose the fact that more than 90 percent of the collection was though a withholding or voluntary compliance. It would also confirm the poor performance of FBR by showing a decrease in the number of return-filers during the last ten years. FBR stalwarts have been showing higher collection figures to get bonuses, but destroying the export sector by unlawfully withholding their refunds. FBR on its own could not have been indulged in this undesirable act unless backed by the government of the day. And if it is doing this at its own behest, the matter is even more serious — It proves failure of the successive governments and Public Accounts Committee. This time, luckily we have an economist and ex-governor State Bank as caretaker Minister for Finance & Revenue and under her supervision the current fiscal year will close. It is hoped that for the first time correct disclosure of collection figures will be provided to the nation after deducting the actual amount of refunds payable — withheld for years to show ‘extraordinary performance’ (sic). Not only true disclosure is essential but all due refunds should be paid without any further delay with compensation. The writer is Advocate Supreme Court and Adjunct Faculty at LUMS. Email: ikram@huzaimaikram.com; Twitter: @drikramulhaq Published in Daily Times, June 10th 2018.