Govt's list of SOEs largely remains intact

Cabinet body declares PRAL, Pakistan Single Window as essential state entities

ISLAMABAD:

The government on Tuesday declared Pakistan Revenue Automation Limited (PRAL) and Pakistan Single Window (PSW) as essential entities aimed at retaining them in the public sector – the companies that are the digital eye of the tax machinery and the interface for global trade.

The decision was taken by the Cabinet Committee on State-owned Enterprises (CCoSOEs), which was in the process of vetting all public sector firms to see whether they were essential, strategic or fit to be privatised.

PRAL handles the taxpayers' data while PSW – a digital trade platform – deals with the country's international trade data. The cabinet committee re-appointed the existing board of First Women Bank Limited for another term of three years. It also included Sheharyar Ahmad, director to the finance minister and deputy secretary in the finance ministry, in the board to have a check on the independent directors on behalf of the government.

Headed by Finance Minister Muhammad Aurangzeb, the CCoSOEs is now declaring almost every government entity as either essential or strategic by moving away from its original intention to privatise most of the state-controlled firms.

Last month, it declared Karachi Shipyard and the Telephone Industry of Pakistan as strategic despite some internal reservations.

The finance minister was initially of the view that there was no function of the government that the private sector could not perform more efficiently. PSW is a virtual system available to all the users involved in cross-border trade. A PSW's independent assessment report stated that the PSW must be able to cover all trade flows based on bulk, break-bulk, liquid (vessel and pipeline) and containerised trade.

PSW operates not as a Customs clearance system but as an amalgamation of all processes (regulatory, trade and commerce, transport and logistics, and finance), public and private, required to undertake a cross-border trade transaction, irrespective of the form of trade, according to the assessment report.

PSW faces an uphill battle in bringing about trade facilitation reforms, if Pakistan continues the trade regressive policies for collecting tax revenue as well as tariffs through Customs, read the report. PSW was established in April 2021, as part of Pakistan's commitment to the World Trade Organisation (WTO) to facilitate trade. To evaluate its progress, a third-party assessment was conducted. The government has also set up PRAL as an SOE of the Revenue Division for the automation of taxation process and digitalisation of trade.

The Federal Board of Revenue (FBR) is of the view that its taxation systems deal with highly sensitive financial and personal data and its software is aimed at facilitating the taxpayers in complying with tax laws. PRAL, being the technology arm of the FBR, develops, maintains and updates this software.

However, PRAL's data authenticity remains questionable. Its tax numbers often do not match with the collection deposited in the State Bank of Pakistan.

For the last fiscal year, the government announced tax collection of Rs9.311 trillion, which was based on PRAL's data. But the actual collection was Rs12 billion less than the figure reported by PRAL due to the variation in refund payment data.

The cabinet committee decided to reappoint the existing board of First Women Bank Limited on the pretext that the bank's privatisation was at an advanced stage and the existing board's continuation was necessary for the job.

It decided to keep Najeeb Agrawalla as chairman of the bank. The committee also retained Bhushra Ehsan, Wajahat Rasul Khan and Naghmana Hashmi as directors for the next three years.