Tax figure fudging: Pawns fall, king plus one survive

FBR chairman receives a clean bill from a parliamentary panel.

ISLAMABAD:

In an attempt to brush the tax figure fudging scandal under the carpet, the government on Friday transferred almost the entire top bureaucracy of the Federal Board of Revenue (FBR) except its chairman and another key official.

A parliamentary panel also gave a clean bill to chairman FBR but demanded that the government severely punish the other officials who brought disrepute to the country.

The National Assembly standing committee on finance did not question FBR Chairman Salman Siddique on taking advances from banks to initially cover up tax figure fudging.

On June 30, FBR chairman claimed that the tax machinery surpassed the target and collected Rs1,590 billion.

His claim was proven incorrect later and he resorted to taking Rs40 billion in advances from banks and state-owned entities to bridge the shortfall, after learning that the actual collection was Rs1,541 billion.

(Read: A history of figure fudging)

Chairman, plus one survive

Through two separate notifications, the government transferred ten grade 21 officials and 20 officers from grade 20, in addition to bringing in four new members in the FBR.

However, as widely speculated, Chairman FBR Salman Siddique would continue to ‘serve the country’.

Another key player, Chief Commissioner Large Taxpayer Unit (LTU) Islamabad Ijaz Hussain Shah, who obtained Rs18.5 billion in advances to cover up the mess, would continue at his present position.

Chief Commissioner LTU Karachi Shahid Hussain Jatoi, however, who obtained over Rs21 billion in advances at the chairman’s behest, was transferred to the FBR headquarters.

The government also transferred head of Inland Revenue Khawar Khursheed Butt to Lahore. “I served in a dignified manner and people at the helm of affairs know that I have nothing to do with figure fudging issue,” said Butt who will be replaced by director-general intelligence and investigation, Shahid Hussain Asad.

Additional secretary FBR Asrar Rauf, who was found to be the “main spoiler who misled the chairman” in an inquiry led by Finance Minister Hafeez Shaikh, has been transferred and appointed as DG special initiatives Karachi. Chief of administration Tahir Raza Naqvi has also been transferred and replaced with Muhammad Raza Baqir.

Offers to step down, again

The Chairman, however, offered to step down again on Friday while giving his version of the figure fudging story.

“The statement made by me to media was not proven true and I offered to step down but the government asked me to continue”, said Siddique, adding, “I reiterate my stance to step down, in front of the committee.”

He said the FBR was under pressure to perform and in excitement, “we started getting direct information from field formations that ultimately did not match with the data.”

“What transpired was that eleven Regional Tax Offices were reporting gross sales tax figures without deducting refunds, despite access to data,” he said. When the FBR reconciled the data, it was Rs 47 billion short of the claim made in front of media, Siddique said.

(Read: Fudging tax figures)

“All those who reported gross figures were either reverted to FBR or downgraded,” said Siddique. He, however, did not elaborate on what happened on July 4 and 6 when he took advances to cover up the “institutional blunder”.

Punitive measures, not learning

The NA panel recommended that all those responsible should be penalised and a transfer was not enough because their action brought disrepute to the country.

The committee wanted to recommend specific action against these officials but Chairman FBR and Qamar Zaman Kaira of the Pakistan Peoples Party convinced the parliamentarians to leave that to the finance minister.

Meanwhile, the government appears to have learnt little from the fudging fiasco and is sticking to an unrealistic tax collection target of Rs1,952 billion.

The Revenue Performance Group, constituted by the finance minister, has worked out a realistic figure between Rs1,830 and Rs1,870 billion.

“The FBR is sticking to Rs1,952 billion target and would collect Rs90 billion through administrative measures,” said the chairman.







Published in The Express Tribune, September 10^th, 2011.