PM sets up hybrid tax task force

Prime Minister Shehbaz Sharif has constituted a hybrid civil-military task force aimed at broadening the tax base and digitising Pakistan's obsolete tax system after his two policy initiatives could not make any tangible progress despite engaging foreign-funded consultants.

The task force will be chaired by Minister of State for Finance and Revenue Ali Pervez Malik with Major General Syed Ali Raza serving as co-chairman - an unusual set-up in a democratic context, where a major general will co-chair with an elected official.

For comprehensive and end-to-end digitisation of the Federal Board of Revenue (FBR), the PM has been pleased to constitute a task force on digitalisation of FBR with immediate effect, according to a notification issued by the Prime Minister's Office.

The 10-member task force has one month to formulate policy interventions for the FBR's digitalisation, including data automation implementation and software solutions.

The development comes amid Prime Minister Shehbaz Sharif's growing frustration with the lack of progress on his initiatives to broaden the tax base and ensure end-to-end digitization despite hiring the services of McKenzie by taking grants from the Bill and Melinda Gates Foundation.

The incumbent FBR Chairman Malik Amjad Zubair Tiwana has already bowed out after he could not get along with the prime minister. Tiwana will retire from the service on August 15th –almost six months before his due date after he decided to quit.

The names of two Pakistan Administrative Service Officers are being considered for the positions of new chairman of FBR and Revenue Division Secretary.

The prime minister has appointed businessmen and information technology experts as the members of the new task force. Among the members are Ghazi Akhtar, brother of former commerce minister Humayun Akhtar Khan and former minister Haroon Akhtar Khan.

Ziad Bashir has also been made a member.

Amir Malik, ex-chief executive officer of the Pakistan Revenue Automation Limited (PRAL)–a subsidiary of the FBR-has also been made a member of the task force.

Fareed Zafar of Lahore University of Management Sciences and Asif Peer of the Systems Limited are also among the members. Peer is also a member of the Prime Minister's council.

Tania Aidrus has been made a member of the hybrid task force. She was the special assistant to former prime minister Imran Khan but had to leave the position due to a conflict of interest. She holds an MBA from the Massachusetts Institute of Technology (MIT) Sloan School of Management and a BSc from Brandeis University.

Waqas-ul-Hasan of Karandaz and Gohar Marwat, a Project Officer of NADRA, are the other members.

According to the notification, the task force's goal will also be data integration, both vertically with provincial Revenue Authorities and horizontally across government ministries and departments.

The outgoing chairman of FBR Malik Amjad Zubair Tiwana told the National Assembly Standing Committee on Finance last week that McKenzie informed the PM that it would take two and a half years to complete end-to-end digitisation of the FBR.

It is not clear how the task force would effectively work in the absence of the work that will be completed in the next two and a half years.

The Prime Minister's Office stated that the task force will also be responsible for risk-based auditing with Computerised National Identity Cards as a single primary identifier to broaden the tax base.

It will give recommendations for supply chain automation of wholesalers, distributors and middleman networks. Shehbaz Sharif's government has introduced a new scheme for retailers from last month, which has legally excluded the majority of the retailers from its ambit.

The task force will give recommendations for a track and trace system through an integrated and automated system, according to the notification.

It will also work for the restructuring of PRAL as an independent information technology-driven bureau for generating planning data and creating an interface for trade data sharing with trading partners for effective valuation and appraisal.

A day earlier, the prime minister had also constituted a task force to identify and oversee the implementation of structural reforms in the power sector of Pakistan.

The power sector task force will work to reduce the financial burden of the sector being borne by the federal government and to enable the establishment of an efficient, liquid and self-sustaining competitive power market.

Federal Minister for Power Sardar Awais Ahmad Khan Leghari will be the chairman and Lt. General Muhammad Zafar Iqbal has been made a national coordinator of the task force.

The power sector task force will work to review matters about the set-up cost of various Independent Power Producers (IPPs) in the country and identify malpractices, procedural weaknesses and regulatory gaps to recommend the way forward to rectify these.

It will also review the compliance of IPPs with the parameters and terms and conditions of various agreements signed with the government and will recommend measures to resolve the issue of circular debt stock in the energy sector.