Daily Times

The current government, in its resolve to steer the nation towards economic viability and development on the basis of domestic revenue resources and debt servicing, has set a target of Rs 5,500 billion for the Federal Board of Revenue (FBR) in the current financial year. It is a herculean task for FBR to achieve due to the inaction of the government to act decisively against rampant corruption, incompetency of the bureaucracy within FBR on one hand, and on the other, the government’s failure to listen to the genuine demands of FBR officers. An attempt is made to find the reasons due to which FBR is likely to miss its revenue target for the year in the following paragraphs.

Broadening of Tax Base:

Pakistan has the lowest tax to GDP ratio in the region. For the achievement of the revenue target for the current financial year, improvement on this aspect cannot be hoodwinked. This aspect of taxation would require the following interventions:

Centralised structure:

There is a worldwide trend of public service delivery through decentralisation and public service delivery at the doorstep. FBR, in its last restructuring during the Musharraf regime, centralised the tax machinery structure, doing away with offices in the peripheries. It made hurdles in facilitating the taxpayers at their doorsteps on one hand, and on the other hand, facilitated consultancy services rendered by officials within the office premises at large scale. Offices and infrastructure at the peripheries were made redundant.

Recently, an effort was made for revival of taxation services at the tehsil level for broadening of tax base and strengthening the enforcement and audits, in addition to tax facilitation through the concept of district taxation offices with its sub-offices at the tehsil level. However, the funds required for the intervention were denied to FBR by babus in the finance division. They thought that construction of sewerage lines, bricking the already cemented streets and repair of roads for non-tax compliant nation on borrowed money was more important than provision of funds on emergency basis for the renovation and construction of tax offices at the district and tehsil level for initiating an effective drive for revenue collection and tax broadening.

Logistics:

It is one of the unattended issues due to which FBR is made prone to corruption. The per official space available in the field offices of FBR is the smallest in the world, and much less than the one prescribed by the Public Works Department. The pace of work on the under construction infrastructure is slow. The field force can’t be operationalised full throttle due to an acute shortage of offices, accommodations, vehicles and fuel. Misuse of monetisation facility is very common, and almost all BS 20 and above are in the possession of official vehicles, in addition to the ones with the retired officers. The official accommodations available for the service at various stations are very few and in a pathetic state. An officer with family has to live in a portion of a rented house or in a room to meet both ends meet. In short, it would be the availability of the required logistics to FBR that would serve as a key factor for broadening of tax base in addition to achievement of assigned revenue target.

Most of the officers elevated to BS 22 in IRS are dead wood that have no interest in the affairs of the service. Field officers have coined the term’corpses without coffins’ for them

Tax officer to population ratio:

The tax officer to population ratio in Pakistan is very low in the region. The government is generous to sanction posts in the hierarchy of the general cadres of the bureaucracy but not willing to sanction adequate posts in various grades of the IRS for effective broadening of tax base and achievement of the Herculean assigned revenue target. The dream of the effective taxation at tehsil level would materialise only if the tax officer to population ratio is improved, enabling FBR to identify potential taxable activities at the tehsil level for broadening of tax base and collection of taxes.

Quality of Work:

The human resource in the organisation would be able to deliver if they are working under refined supervisory officer who polishes and appreciates the skills of the workforce developed and applied for the achievement of the assigned targets. The achievement of the assigned revenue target of Rs 5,500 billion would require the government to consider this aspect of the organisation.

Corpses without coffins:

It is a very unfortunate state of affairs that most of the officers elevated to BS 22 in the Inland Revenue Service (IRS) are dead wood that have no interest in the affairs of the service. They bother about nothing except their retirement benefits and post-retirement opportunities. Field officers have coined the term ‘corpses without coffins’ for them, as their contribution to improvement of working conditions and welfare of the organisation is nonexistent. Doubts arise on the sanctity of the high-powered boards and the i-reports on the basis of which these officers are elevated.

Rampant corruption:

Mere threats from the government without decisive action have added to the courage of the incorrigible and the corrupt in FBR. Their motive is to earn more for securing their future. Achievement of the assigned revenue target for the year would be a mirage if this aspect of the tax machinery is not checked.

Rampant consultancy:

FBR recently issued a circular imposing a ban on consultancy services rendered by its human resource. It also transferred staff in Karachi, Lahore, Islamabad and Rawalpindi, which ended the clientage of the officials posted in these stations. It has been learnt that the head of the organisation is under immense pressure from various sources for the reversal of the orders, in addition to not issuing further transfer posting orders to curb this menace of consultancy. The transfer posting orders made in this context in small stations were cosmetic.

Quality of human resource:

The human resource employed for the achievement of the assigned revenue target needs to be in high spirit. It would be possible if they are rewarded for their contribution to the service and the objective of the organisation. The achievement of the assigned revenue target of Rs 5,500 billion would remain a myth if this aspect of the workforce is ignored.

Lowest paid human resource:

The World Bank in its reforms project of FBR recommended three basic pays for the human resource posted in the field formations for controlling corruption and promoting efficiency. The government restricted this recommendation to double basic pay, and it continued for some time. This additional basic pay was frozen in the previous regime, killing the purpose for which it was introduced. Most of the human resource posted in FBR is highly skilled, and the remuneration they receive, at the moment, is the least in the region.

Ironically, the babus in the provincial bureaucracy were incentivised with an executive allowance equivalent to one and a half of their basic; they are spending specialists. Many talented officers are leaving the pool of corruption created by the government for a clean and better future abroad. The assigned revenue target of Rs 5,500 billion could be achieved only if the workforce is incentivised by introducing a special pay package for the human resource of the service.

Promotion path:

One demoralising factor for officers posted in the service is the absence of their promotion path. In pursuance of the Musharraf regime reforms, officers were inducted in the IRS in bulk without taking their promotion path into consideration. This aspect could be a possible reason for the brain drain of the organisation; many people see a better future outside the organisation or the country. The morale of the human resource posted in the organisation could be improved through provision of a decent career path to officers of the IRS for the achievement of the assigned Rs 5,500 billion.

The gist is that the assigned revenue target of Rs 5,500 is achievable if the above-given points are considered and redressed on emergency basis, enabling the plagued organisation to work effectively for the construction of Naya Pakistan as envisioned by Prime Minister Imran Khan.

The writer is a Pakistani journalist currently based in Malaysia