Power grab: FBR’s top body fails to resolve transfer powers’ deadlock

Board-in-Council sets up panel to mediate issue between chairman and senior officials.

ISLAMABAD:

The deadlock over the concentration of powers in the office of its chairman persists after the Federal Board of Revenues’ highest decision-making body failed to resolve a matter that has begun to take its toll on the government’s tax collection efforts.

The Board-in-Council of the FBR formed a committee, chaired by the head of legal affairs of the organisation, to find a middle ground between FBR Chairman Salman Siddique, who wants to retain the powers of posting and transferring officials, and the departmental heads within the FBR, who want those powers back.

On April 2, Siddique took away the power of transferring officials from the various heads of the constituent services that form the FBR, leading to serious disputes between the chairman and senior FBR officials. Sources within the FBR said that the dispute may begin affecting the tax collection efforts of the government.

One senior FBR officials said that there were signs that the chairman might retreat from his stance and rescind the April 2 order in which he appropriated those additional powers for himself.

Meanwhile, the FBR’s woes seem set to continue as employees of the tax-collecting body continued to stage token strikes over the withdrawal of a special allowance from July.

“If the government does not reverse its decision, we may issue a call for a complete strike,” said Rashid Shah, senior vice president of the Federal Revenue Alliance, a union of FBR employees.

The Board-in-Council also reviewed progress in the FBR’s efforts to broaden the tax base and found serious flaws.

The FBR has launched a campaign against 700,000 potential tax evaders. Yet the FBR appears to admit that it has mishandled the campaign.

Sources said the FBR decided to first analyse the taxpayers’ data at its Islamabad headquarters before sending them to its field offices. The data had previously gone directly from the National Database and Registration Authority (NADRA) to the field offices.

FBR officials admit that constraints in the capacity of the organisation often led to raw data being sent to the field offices, where corrupt officials were able to use the complicated data to extort bribes from ordinary citizens.

In order to overcome this problem, the FBR has decided to provide additional resources to its investigation and intelligence wing. The FBR constituted another committee to address the issue of rising review pleas to the office of the President against the decisions of the Federal Tax Ombudsman. Almost three-quarters of the FBR’s review pleas are being rejected by the President. Sources said the FBR recognised the need to reduce the appeals ratio – a demand also put forward by the office of the FTO.

The Board-in-Council rejected a plea by head of the sales tax division, Iftikhar Qutab, to withdraw an explanation notice sent to him by the FBR. The Board decided that Qutab should submit written reply to the notice where he had been asked to explain why he had said that corruption in the sales tax department had increased after the creation of the Inland Revenue Services.

Sources said that Qutab was aiming to be promoted to a Member of the FBR, the highest tier of officials in the organisation, and had begun a smear campaign against the IRS to get it divided into two, which would benefit him personally.

Published in The Express Tribune, August 9^th, 2011.