FBR seeks retention of 1,730 posts

Cites critical staffing needs amid automation drive to justify exemption

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ISLAMABAD:

The Federal Board of Revenue (FBR) on Friday requested the government to allow it to retain nearly 1,730 positions seeking an exemption from the federal cabinet's directive to abolish 60% of vacant posts. This indicates the tax authority's preference to keep the current size of the organisation despite the digitalisation drive.

The tax authorities made the formal request during a meeting of the Cabinet Committee on Rightsizing of the federal government. Headed by Finance Minister Muhammad Aurangzeb, the committee did not immediately take the decision on whether to recommend the relaxation to the cabinet.

In response to challenges faced by the FBR, the Revenue Division proposed a one-time dispensation from the requirement to abolish 60% vacant posts within its field formations, according to a press statement issued by the finance ministry after the meeting.

It referred the matter to a sub-committee, chaired by Salman Ahmad, ambassador-at-large, with a direction to review the FBR's request and take a decision.

The federal cabinet in August last year had decided to abolish 60% of all vacant positions. Many departments have not yet implemented the instructions.

There are about 23,822 sanctioned posts in the FBR, of which 2,883 are vacant. As per the cabinet's decision, at least 60% of these posts, or 1,730, have to be permanently abolished. These positions have been vacant for years, but in the budget, funds are allocated to pay salaries. These unspent funds are diverted towards other heads to utilise them before the close of the fiscal year.

Out of the 2,883 positions, there are 24 positions in the officers' category.

Former FBR chairman Syed Shabbar Zaidi had advocated abolishing at least 10,000 FBR positions to bring efficiency. Around 97% of the FBR's tax collection is automated on account of withholding taxes, advance taxes, and import stage taxes.

Sources said that the rightsizing committee did not discuss the FBR's request in depth and referred the matter to its subcommittee.

The FBR sought the exemption on the grounds that many critical positions were vacant and, under the FBR's transformation plan, it needed to hire more people.

A presentation by the Revenue Division highlighted key aspects of the FBR transformation plan, focusing on initiatives designed to modernise the Customs Department, according to the press statement.

The transformation plan, approved by the prime minister on September 19, 2024, aims to improve operations, including automation and technology integration, such as the Faceless Customs Assessment and Examination.

The Rightsizing Committee was briefed on steps taken by the Revenue Division to streamline operations, including the abolition of 158 posts (BS-18 and below) and the designation of 27 posts (BS-16 to 20) as "dying posts," as part of the cabinet decision on August 27, 2024, said the finance ministry.

Aurangzeb acknowledged the challenges the FBR had faced due to under-investment over the years and reiterated the importance of embracing technological advancements, such as the implementation of automation systems, to improve efficiency and service delivery, it added.

The meeting concluded with a clear directive for a follow-up examination, with a focus on rightsizing measures that ensure effectiveness, better service delivery, and sustainable public policies.

The FBR is of the view that some of the key areas in which it faces capacity challenges include audit capacity, sectoral expertise, legal expertise, and highly skilled post-clearance audit capacities on the Customs side.

In terms of lack of audit capacities, the FBR is severely understaffed, with only 355 filled auditors on the IRS side. This restricts the FBR from conducting its day-to-day audit activities at the required potential.

There is a shortage of 1,559 auditors on the IRS side and 60 auditors on the Customs side for the Post Clearance Audit (PCA).

The cabinet has already approved funds to hire 1,619 auditors to fill the human resource shortfall.

The FBR stated that the post-clearance audit is a specialised and technical function requiring qualifications and expertise in accounting, business finance, customs appraisement, data sciences, information technology, etc.

As such, the existing scarce human resource is neither qualified nor trained for the specialised function, due to which the effectiveness of the PCA has remained limited.

The FBR is going to engage four sectoral experts for each of the 25 tax offices, totalling 100 sector experts. In the first phase, these experts shall be hired for large tax offices. The financial implications for hiring sector experts will be Rs348 million for the remainder of this fiscal year and Rs1.3 billion in the next fiscal year.

According to the transformation plan, the FBR wants to strengthen its post-clearance audit function by engaging 25 technical experts through a third-party payroll firm. The technical experts shall hold the roles of customs valuation experts, sectoral risk analysts, and data scientists. The financial implications of hiring technical experts for strengthening the PCA directorate will be Rs33 million for the last six months of the current financial year, followed by Rs73 million for the next financial year.