ISLAMABAD: Prime Minister Imran Khan has appointed Shabbar Zaidi as the new chairman of the Federal Board of Revenue (FBR). A chartered accountant by profession, Zaidi has vowed to bring administrative reforms in the tax machinery.
The prime minister gave preference to Shabbar Zaidi over Ahmad Mujtaba Memon –a Grade 21 career bureaucrat of the Pakistan Customs. Memon was the nominee of the PM’s Adviser on Finance Dr Abdul Hafeez Shaikh. The Establishment Division did not issue a notification for the appointment of Zaidi till the filing of this news story.
About six months back, the government had offered Zaidi to become the FBR chairman but at that time he had refused to accept the job. The announcement about Zaidi’s appointment was made by Prime Minister Imran himself during an interaction with senior journalists in Islamabad.
Last week, the government decided to remove FBR chairman Jahanzeb Khan, but he is still coming to the office as the Establishment Division did not issue his transfer orders.
Zaidi may face legal challenges due to a June 2013 Islamabad High Court (IHC) judgement in former FBR chairman Ali Arshad Hakeem’s appointment case. The IHC had annulled Hakeem’s appointment over lack of competitive process and transparency.
It is the third major appointment by PM Imran in last three weeks. Earlier, he changed finance minister Asad Umar and the State Bank of Pakistan governor Tariq Bajwa.
“Before my appointment, I had informed the prime minister about any adverse implications of Ali Arshad Hakeem case,” said Shabbar Zaidi while talking to The Express Tribune. He said the appointing authority should take care of any legal obstacle.
“The PM has approached me to help him in bringing reforms in the FBR and I have accepted his offer. I will join the office in the next couple of days,” he added. Zaidi is a senior partner at A F Ferguson, a top chartered accountancy firm. He will have to resign from the firm to avoid conflict of interest.
Earlier, Dr Shaikh, the de fact finance minister, had picked Ahmed Mujtaba Memon as the new FBR chairman. However, the government had withheld the notification.
A ministerial committee meeting had been called for Monday to vet the case of Memon. But the committee did not meet after the PM decided to appoint Zaidi as the new FBR chairman.
Zaidi said his first priority was to bring administrative reforms in the FBR. He said he would also try to tax the people’s real incomes while moving away from the current regressive taxation regime. He vowed to restore the trust of taxpayers and enhance the narrow income tax base of the country.
Zaidi is known for his extensive contribution towards development of taxation and fiscal laws of the country. He is a trustee of the Sindh Institute of Urology and Transplantation and a member of the board of governors of the Liaquat National Hospital in Karachi.
He has also remained the president of the Institute of Chartered Accountants of Pakistan and the chairman of the South Asian Federation of Accountants. He has also authored many books, including ‘Panama Leaks – A Blessing in Disguise’ and ‘A Journey for Clarity and Pakistan: Not a Failed State’.
After assuming office, Zaidi is expected to push the case of tax amnesty scheme. He has been advocating allowing people to avail the tax amnesty scheme at very low rates.
The FBR has been facing serious administrative and policy problems. Its tax collection is growing at only 2% rate as against the nominal Gross Domestic Product rate of 12%. The FBR has faced over Rs345 billion shortfall in achieving the tax target during first 10 months of the fiscal year.
Getting full cooperation of taxmen will also be a challenge for Zaidi, as historically the FBR officers have never welcomed chairmen other than from their own service groups.