FBR body terms PM Imran’s tax restructuring plan flawed

SOURCEThe Express Tribune

ISLAMABAD:  The Inland Revenue Service Officers Association (IRSOA) – the representative body of top taxmen in Pakistan – on Wednesday described Prime Minister Imran Khan’s tax machinery restructuring plan as ill-conceived and flawed, and alleged that it was designed by “vested interests”.

The IRSOA issued a strong-worded press note in the first public reaction to PM Imran’s restructuring plan, warning that the uncertainty created by the approved plan “could be very damaging for the national revenue collection targets”.

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The IRSOA held an emergency meeting in the FBR headquarters and reaffirmed its “unwavering support to the strategic reforms envisioned by the government in order to strengthen the national revenue system”. “The association placed this on record that a common man with little knowhow of tax systems, organisations in the region and the world will scrap the proposed plan at first sight,” said the statement.

The association took serious note of the ill-informed and ill-conceived proposed restructuring plan of the FBR, which prima facie seems to be hastily sketched by vested interests and without taking input from the constitutionally mandated cadres of the relevant revenue services, according to the press note.

On October 3, PM Imran approved the plan for restructuring the FBR in an interim period and then setting up the Pakistan Revenue Authority. The Express Tribune reported the restructuring plan on November 1 and after that the tax machinery started reacting strongly against it.

FBR Chairman Shabbar Zaidi agreed on Tuesday to set up the PRA only after taking input from all stakeholders but he did not address the machinery’s concerns.

“Although the chairman assured that no reform action will be taken arbitrarily without taking the input of all tiers of the organisation, yet the ambiguous stance regarding withdrawal of the proposed plan by the various government functionaries and ministries is breeding uncertainty, frustration and anger in the tax machinery, which could be very damaging for the national revenue collection targets,” cautioned the association.

The association expressed deep resentment, saying that the Inland Revenue Service, which collected 86% of the total national tax revenue, had been left out completely at the planning stage.

It added that the association had voiced disappointment over the flawed plan, which had adversely affected the moral, confidence and passion of hardworking and honest officers and employees of the FBR, with potential harmful effects on the national revenue efforts that were at their peak in the middle of the financial year.

The association pointed out that despite a decline in the gross domestic product (GDP) growth rate, weak tax culture and ecosystem in which the FBR operates, “we have achieved a growth of 16% in revenue and are poised to meet the assigned targets”.

It expressed hope that the alternative, indigenous and home-grown plan being submitted to the authorities would be adopted, which may be improved further through consensus by bringing in input of all the stakeholders.

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Without naming PM Imran, the IRSOA requested the national leadership to look into the matter seriously and scientifically, keeping in view the regional and global tax systems and cultural context in order to institutionalise solid, meaningful and sustainable reforms in the larger national interest rather than “sketchy and cosmetic measures driven by vested interests of a few”.

The IRS officers were of the view that reforms needed to be properly sequenced and creation of the PRA had to be initiated and implemented first before undertaking any other reorganisation initiative.

The top taxmen also opposed the PM’s decision to appoint two deputy chairmen of the FBR for Inland Revenue and Customs. The government also wants to abolish the grade-21 post of chief commissioner of IRS and directly place 174 commissioners under the member IRS North Operations and Member South Operations. The FBR officers were of the view that each member operation could not handle 87 commissioners. This will not only increase the work load but will also weaken checks and balances.

Published in The Express Tribune, November 7th, 2019.

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