The government has decided to appoint Asim Ahmed as chairman of the Federal Board of Revenue (FBR), who will be facing an immediate task to prepare next year’s budget with an aim to collect around Rs7 trillion in taxes and clean the department from tainted taxmen.
Asim’s appointment will initially be made for a period of four months but the FBR, which will have eighth chairman in four years, needs consistency in strategy and policies that is only possible when there is a chairman for longer tenure.
The last government of Pakistan Tehreek-e-Insaf (PTI) had appointed seven chairpersons in three years.
The federal cabinet will today (Wednesday) take up a summary of the Establishment Division to remove Dr Ashfaq Ahmad from the position of FBR chairman, who remained in office for eight months. Ashfaq’s removal was imminent in the new political setup due to his role in framing a tax case against Justice Qazi Faez Isa, which backfired.
The summary to remove Ashfaq and appoint Asim is part of cabinet meeting agenda, a senior government official confirmed to The Express Tribune. Asim on Tuesday also met with Prime Minister Shehbaz Sharif at his office.
Asim – a grade-21 officer of the Inland Revenue Service (IRS) – had not been given any post after his removal as chairman of the FBR in August last year. It will be the second time that Asim will be made FBR chairman. Earlier, he had remained at the helm of affairs from April to August 2021 and was succeeded by Ashfaq Ahmad.
Asim became the frontrunner after the government dropped, for now, the plan to appoint Dr Tariq Huda as FBR chairman. The premier had also interviewed a few officers from the Pakistan Administrative Service.
Former finance minister Shaukat Tarin had blamed Asim for his mishandling of cyber-attack on the FBR’s database. However, all the other characters directly responsible for the protection of database remained untouched.
Some of them working in PRAL – the information technology arm of the FBR – got promotions and bonuses.
Asim will face immediate challenges in preparing next year’s budget, cleaning the tax machinery from the tainted officers serving in field offices, particularly in Karachi, and preparing a strategy to collect around Rs7 trillion in taxes in the next fiscal year.
He will also have to work to end harassment of taxpayers, who were subject to undue tax demands. For the ongoing fiscal year, the IMF and Pakistan had agreed on a Rs6.1 trillion tax collection target, which now seems impossible due to the FBR’s inability to focus on domestic sales tax and income tax collection. The FBR’s sales tax collection at the domestic stage was negative 8% when the inflation rate in Pakistan was 12.7%, highlighting its inefficiency.
Ahmed will be required to prepare a strategy to achieve around Rs7 trillion in taxes, which the IMF is demanding for the next fiscal year 2022-23.
The outgoing FBR chairman was responsible for the protection of information received from the Organisation for Economic Cooperation and Development. But this information was shared with the Asset Recovery Unit, which framed a case against the Supreme Court judge.
In order to give legal cover to this act, the last government had made changes in the Income Tax Ordinance 2001 by amending Section 216 and deleting Section 198 that dealt with punishment for breach of taxpayers’ information.
Finance Minister Dr Miftah Ismail said last week that during any next legislative opportunity, Section 216 (T) of the Income Tax Ordinance will be withdrawn.
Through an amendment in the tax law, the previous government had allowed the taxmen to share the personal information of the high public officials with National Accountability Bureau (NAB) and other investigation agencies with effect from 2001. Many then questioned the motives of the amendment.
Through another amendment, the government had also repealed Section 198 to protect taxmen from the punishment of sharing such classified information.
“Section 198 shall be omitted and shall always be deemed to have been so omitted since the commencement of the Income Tax Ordinance 2001,” according to the ordinance.
However, the ordinance that deleted Section 198 would lapse on May 15, which would restore Section 198 and could provide room for the prosecution of those officers who were responsible for the protection of the taxpayers’ information.
Published in The Express Tribune, April 27th, 2022.
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