Daily Times

The Federal Board of Revenue (FBR), under Shabbar Zaidi, seemed to be the only economic wing of the Pakistan Tehreek-i-Insaf (PTI) government which was doing extra efforts to generate pace in revenue collection. In the first five months of the previous fiscal year, the FBR collected additional Rs 209 billion, thanks to reforms in taxation system, procedures and withdrawal of exemptions. This was achieved despite a compression of around $5 billion in import duties and slow growth. Shabbir Zaidi, however, could not prolong his stay in the treacherous power corridor of the FBR. Since his departure, the FBR has seen a consistent round of change of faces. Since assuming power back in 2018, this government has changed four FBR chairpersons, who had to leave for failing to improve performance. In a recent move, the government changed taxmen who posted to the seats just two months ago. The reshuffles are taking place on the basis of likes and dislikes, and not performance. Not to mention that the FBR needs reforms and consistent policies for a hike in tax collection. Over all, tax policies are degenerating, complex and outdated. The system cannot withstand doer officers. Thanks to cumbersome systems and corruption in the FBR, most of the people have no issue with paying indirect taxes than to become a registered tax filer. That is why only salaried people make the dominant part of tax filers, while two-thirds of the tax collection come through indirect withholding or advance tax regimes.

While our government suffers from incompetency at several layers, the tax system is the biggest reason behind the poor economy. The government lacks will and plans to make a turnaround in the FRB. On paper, the government’s plan to make the FBR the Pakistan Revenue Authority seemed vibrant but its senior officers thwarted the original plan. Every time a government of the day introduces changes to the FBR, stiff resistance from the board’s senior officers sets in. Now, when the country is facing acute slow growth because of the pandemic related measures, the FBR should have come up with an out of box solution to keep the economic activity in the swim but it never did so. It has yet to document the economy and introduce a progressive plan to generate enough tax revenues. The government needs to implement progressive tax policy and reforms in the FBR administration as reshuffle is not going to bring about any change to the tax system. *