Concentration of authority: FBR to decide on chairman’s powers

Salman Siddique took away the power of transferring officers from senior tax officials on April 2.

Express August 06, 2011


In a bid to settle a row that developed over the concentration of powers in the office of its chairman, the Federal Board of Revenue has called a meeting of its highest decision making body on Monday.

FBR Chairman Salman Siddique’s decision on April 2 to take away the power of posting and transferring FBR officers from the tax body’s senior-most officials has become a bone of contention within the organisation.

Sources familiar with the situation said that the Member Administration – one of the senior-most officials at the FBR and part of its governing body – has been making all transfers and postings to key positions within the country’s primary tax collecting organisation, in conjunction with the FBR chairman, allegedly under political pressure.

A meeting of the Board-in-Council of FBR would be held on Monday to resolve the dispute.

However, sources said the chairman was dragging his feet by asking that the matter be decided by the highest decision making body of the FBR. The April 2 order was issued without Board-in-Council approval.

On July 23, soon after the figure-fudging fiasco became public, Siddique had issued another order in which he returned the powers of transferring officials to the head of the Inland Revenue Service.

Sources said that after being given his authority back, Khawar Khursheed Butt, the head of the IRS, recommended the transfers of several officials whom he believed were underperforming or had been posted under political pressure, according to sources familiar with the situation. However, Siddique is said to have been blocking most of Butt’s recommendations.

The bickering between the top level of the FBR’s hierarchy has been blamed for officials misreporting the tax collection figures for fiscal year 2011. The government had initially reported that it had met its revised target of Rs1,588 billion but was later forced to admit that the real figure was Rs1,550 billion.

Among other issues that the Board-in-Council is likely to take up is the revenue generation strategy for the fiscal year ending June 30, 2012. After having admitted to failing in meeting its target for last year, the FBR has admitted that the budgetary target of Rs1,952 is an unrealistic figure. FBR officials have asked for 15 days to formulate a more achievable target for the current fiscal year.

The FBR’s highest decision making body is also likely to discuss the Rs131 billion in tax dues that are stuck due to litigation in various courts. Several meetings between various government organisations have not yet made any progress on the matter.

The FBR has recently made attempts to prosecute tax evaders but has found its efforts mired by slow courts and corruption within its own ranks. The Board-in-Council will also take up the matter of Rs102 billion in illegal input adjustment claims by sales tax payers. The field formations have challenged the amount and the council would work out a realistic figure.

Published in The Express Tribune, August 6th, 2011.