Federal Board of Revenue (FBR) Chairman Malik Amjad Zubair Tiwana has sought an early retirement from service after he could not reconcile with the Prime Minister's Office – a move that opens a race for his replacement from within and outside the tax machinery.
Tiwana has sought retirement with effect from August 15th – six months ahead of reaching the age of superannuation. The chairman FBR confirmed to The Express Tribune that he had sought early retirement.
Tiwana had been contemplating premature retirement even before the budget because of constant pressure and meddling from the Prime Minister's Office. However, he withheld the decision due to the budget exercise and the talks with the International Monetary Fund (IMF).
Tiwana finally dispatched the retirement request to the Prime Minister's Office and the finance minister on Monday evening.
"We will always respect requests coming from all quarters in terms of early retirements. These need to be properly discussed ahead of final decisions," Finance Minister Muhammad Aurangzeb replied when he was requested to comment, whether he had accepted the request made by the chairman.
Tiwana, from the Inland Revenue Service, had been appointed FBR Chairman a year ago due to his expertise in both policy and operational matters. Despite the challenging times, the FBR managed to show a 30% increase in tax collection during the last fiscal year, although the total collection remained short of the goal by about Rs104 billion.
For the new fiscal year, the government has set a highly ambitious target of nearly Rs13 trillion that requires about 40% increase in the collection. For the month of July, the tax target is Rs656 billion and the FBR has so far pooled Rs575 billion. It needs another Rs81 billion on Wednesday (today) to meet the monthly target.
If the government accepts Tiwana's request, there will be a open race for the Customs Group, the Inland Revenue Service and importantly for the powerful Pakistan Administrative Service (PAS) to grab the position.
The rift between the Customs and the IRS officers has provided another opportunity to the PAS to take over yet another grade-22 level position – a chance that had been denied to it a year ago after the then finance minister and now Foreign Minister Ishaq Dar put his weight behind Tiwana.
Tiwana is a Grade-21 officer but was given the Grade-22 position, like many other PAS officers, serving as federal secretaries. He was poised for promotion in the Grade-22 in the next High Powered Board meeting. But Tiwana bowed out, apparently proving the conspiracy theories wrong that he had orchestrated the exit of many Customs and IRS officers to make room for his own promotion.
Sources said that due to direct intervention by the Prime Minister's Office in the working of the FBR and the prime minister's displeasure over the way the tax affairs were being run, Tiwana decided to take premature retirement.
They added that the chairman had made up his mind to finally quit after a "rough meeting" last Friday that was chaired by the prime minister regarding the FBR's issues.
The prime minister was annoyed on virtually every issue that was discussed in the meeting, particularly the construction of the FBR office buildings under the public-private partnerships and some of his reforms related initiatives.
The prime minister wanted the construction to be handed over to the private sector.
There were also differences of opinion on the issue of the ongoing digitisation exercise being led by the foreign consultant McKenzie. The prime minister has hired McKenzie for end-to-end digitisation of the FBR and the firm was complaining about the non-cooperation from the FBR.
However, the FBR was of the view that McKenzie lacked the expertise and wanted to use the FBR to do the work assigned to it by the prime minister.
McKenzie also found huge discrepancies in the sales tax data and claimed to have finalised actionable information for bringing in about 4.9 million non-filers in the tax net.
There were also concerns at the Prime Minister's Office that the chairman was not giving a complete picture to the prime minister on many issues, resulting in a delayed decision-making.
The sources said that during Friday's meeting, the prime minister went to the extent of saying that he might have to appoint a new person for undertaking reforms in the FBR.
There were also concerns about the pending work of the FBR, including delayed implementation of sales tax harmonisation project, simplified tax returns, procurements of information technology equipment under the World Bank project and lack of focus on point of sale and the track and trace systems, said the sources.
The prime minister was also not happy over appointing only IRS officers at the tax tribunals.
If the Chairman's request is accepted, Hamid Atiq Sarwar from the IRS, Mukaram Jah Ansari and Faiz Chaddar from the Customs group may be considered as his replacement. From the PAS, Secretary Power Rashid Langrial might again be considered for the posting.
However, it will not be an easy task for any new chairman to run the FBR given the direct intervention of the Prime Minister's Office, ongoing McKenzie project and more importantly to collect Rs13 trillion taxes by showing a 40% increase in the collection under the IMF umbrella.
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