Tax scandal: NA committee to probe ‘figure fudging’ fiasco

Revised Rs1,550b revenue collection by tax authorities is higher than SBP figures.

ISLAMABAD:

A parliamentary panel on financial affairs has summoned Federal Board of Revenue (FBR) officials on Tuesday to probe “figure fudging” allegations as even the Rs1,550 billion annual tax collection is higher than the reconciled figures of the central bank.

The National Assembly Standing Committee on Finance, Revenue and Economic Affairs will meet today (Tuesday) to investigate allegations of figure fudging by the tax authorities.

The parliamentarians have already demanded that the government constitute an All Parties Committee to probe figure fudging by the tax authorities and misleading of parliament on fiscal deficit data by the finance ministry.

“If FBR people have called a press conference which was based on blatant lies, they will be taken to task,” said Standing Committee Chairperson Fauzia Wahab.

It is yet to be seen how effective the committee will be in finding out the truth in presence of ‘influential bureaucrats’ who in the past managed to control the committee proceedings. Wahab was reluctant to open the session for media. The meeting will be held behind closed doors in the finance ministry.

FBR Chairman Salman Siddique claimed on June 30 that the government had exceeded its revised revenue collection target of Rs1,588 billion in financial year 2010-11, but was forced to admit on Friday last week that the real figure was Rs1,550 billion. His action caused embarrassment to the government and put a question mark over the credibility of statistics and economic managers.

Sources told The Express Tribune that even the Rs1,550 billion figure is higher than reconciled numbers given by the State Bank of Pakistan. They said the central bank was of the view that during the last financial year the tax collection had actually been Rs1,541 billion. However, sources said that FBR, on expectation of certain payments, had released the Rs1,550 billion figure.

They added that the final figure would only be known after reconciled figures are received from the Accountant General of Pakistan Revenue and would determine whether the actual collection remained above or below Rs1,550 billion. The original revenue collection target for the year was Rs1,667 billion, before it was revised downwards to Rs1,588 billion.

In an attempt to save skin, the bureaucrats are trying to give the impression that the falsified tax collection figure was announced for the ‘sake of national interest’. They claim that the aim was to get the suspended $11.3 billion IMF loan programme restored.

Insiders link the issue with personal designs. They take back the issue to March 2011, when Finance Minister Dr Abdul Hafeez Shaikh constituted a core group of five, known as G5, to consolidate last financial year’s accounts and prepare next year’s budget.

These five people included former State Bank governor Shahid Hafeez Kardar, Planning Commission Deputy Chairman Dr Nadeemul Haque, Secretary Finance Dr Waqar Masood, Secretary Economic Affairs Division Abdul Wajid Rana and FBR Chairman Salman Siddique.

Sources said that eventually the core team had been reduced to only two and all the decisions were taken by these two officials. They claimed the FBR chairman was not responsible for this mess alone.

Published in The Express Tribune, July 26^th,  2011.