FBR witnesses biggest shakeup in its history

Decides to transfer 2,500 officials to break criminal nexus; achieve uphill tax collection target

ISLAMABAD: The Federal Board of Revenue (FBR) has decided to transfer more than 2,500 of its officials in an attempt to break their nexus with businesses and improve efficiency, as it plans to build on the success of its tax amnesty scheme.

This grand scale shakeup is the first of its kind in the FBR’s history that is being done while keeping in mind the uphill task of collecting Rs5.550 trillion in fiscal year 2019-20. As a result of these transfers, people with tainted reputation are also being sidelined, said sources in the FBR.

The decision to reshuffle thousands of officials of grade-14 to grade-22 comes on the heels of successful culmination of tax amnesty scheme that has given a good reason to the FBR to go after people who still remain outside the tax net.

On Friday night, the FBR issued transfer orders of 2,150 low-paid staff of Inland Revenue in the first phase of reshuffling. The maximum number of employees, 726, was transferred in Karachi, followed by 565 in Lahore, and 357 in Islamabad.

FBR swoops on benami assets as amnesty ends

As a result of the tax amnesty scheme, around 100,000 people have become filers for the first time, which helped broaden the tax base by another 5%.

This distinguishes the Pakistan Tehreek-e-Insaf’s (PTI) government’s tax amnesty scheme from the Pakistan Muslim League-Nawaz’s (PML-N) scheme in which filing of returns was not mandatory.

Prime Minister Imran Khan has also called a meeting of grade-21 and -22 officers of the FBR next week, which will be followed by transfer orders at the members’ level, sources told The Express Tribune on Friday. The officers serving in intelligence wings of the FBR are also being transferred.

Nearly 2,150 people of the Inland Revenues Service have been transferred while around 500 people of Customs wing in grade-16 will be given new responsibilities aimed at improving efficiency and ending stagnation in formations. The total existing strength of the FBR is over 21,000 personnel.

Over 2,500 transfers and postings are aimed at plugging revenue leakages, curbing smuggling at borders and ports and assessing real incomes of the people.

The success of the tax amnesty scheme has silenced the critics of FBR Chairman Shabbar Zaidi.

Prime Minister Imran Khan picked Zaidi nearly two months ago from the private sector with an objective to infuse out-of-box ideas in the rotten tax machinery.

“As many as 119,595 people have availed the PTI’s tax amnesty scheme and paid Rs55 billion in taxes,” the FBR’s Member Inland Revenue Policy Dr Hamid Atiq Sarwar told the National Assembly Standing Committee on Finance on Thursday.

In terms of participation, the PTI’s tax amnesty scheme attracted 44% or 36,700 more people as compared to the PML-N’s tax amnesty scheme.

These 119,595 beneficiaries whitened Rs2.9 trillion worth of black assets, which was also Rs400 billion or 16% better than the PML-N government’s tax amnesty scheme.

However, the Rs55 billion collection was 55.6% less than Rs124 billion taxes collected under former Prime Minister Shahid Khaqan Abbasi’s tax amnesty scheme. The key reason for low tax collection was the low tax rates that were offered this time, particularly to real estate sector.

Dr Sarwar informed the National Assembly panel that Rs13.5 billion of the tax amnesty will become due in new fiscal year, as many beneficiaries opted to defer their tax liabilities in return of paying penalties.

This will bring total collection under the tax amnesty scheme to Rs69 billion, which is still 44% lower than the last tax amnesty scheme.

The credit to make the PTI’s tax amnesty scheme successful largely goes to the new chairman who took pain to go on mainstream media to campaign for promoting the tax culture.

The chairman FBR is now planning to break the nexus of corrupt FBR officials with the business community. The transfer criteria include stay at a particular post, complaints against officials and officers and deploying people where they are more effective.

Those people who have recently been posted would not be touched, except where there are complaints against them. Despite repeated but half-hearted attempts, the FBR has not been able to prosecute nearly 200 allegedly corrupt officers who are facing inquiries since 2015.

Few months ago, another summary was moved by the FBR to the Establishment Division for seeking PM’s approval to remove grade-20 and -21 officers. But the Establishment Division returned the file on the grounds that there was a need to conduct fresh inquiries against them.

Shabbar Zaidi has already placed a bar on the FBR officials to provide private consultancy.

Zaidi wanted to transfer thousands of officials in the hope that the workforce would go after people are not coming in the tax net. About 2.1 million people have filed their annual income tax returns, although 53 million people pay income tax. This shows that the FBR lacks the will to catch these people, despite having information about their lifestyles.

The sources said the FBR is going to reduce the number of its members from 13 to 8 besides replacing some key members. The Member Inland Revenue Operation Seema Shakil is being transferred for her failure to achieve the annual tax collection target of Rs4.4 trillion set for the last fiscal year.

Assets Declaration Scheme expires today

The FBR has missed the target by a record margin of Rs576 billion. For the first time in its history, the FBR’s revenue collection fell even below last year’s level.

The posts of member Facilitation and Taxpayers Education (FATE), member Strategic Planning Reform and Statistics, member Human Resources, member Internal Audit and member Legal and Accounting Customs are planned to be abolished.

After appointing the chairman from the private sector, the government was considering bringing at least two members from the FBR in the headquarters.

The member Information Technology and chief information officer may be appointed from the private sector. The chief information officer will come in place of member FATE – a post that is going to be abolished along with four other positions of the members.