In a clear violation of the constitution, the Federal Board of Revenue (FBR) has denied auditors access to its accounts in an apparent attempt to hide alleged embezzlement of billions of rupees.
In a meeting of the Public Accounts Committee (PAC) held here on Monday, the auditors complained to parliament’s most powerful body that the FBR was denying access to its systems, creating hurdles in performing the constitutional job of auditing the accounts.
The revelation comes at a time when corruption cases are surfacing one after another in the FBR to the embarrassment of the government.
Presided over by Nadeem Afzal Chan, the PAC meeting was called to examine Rs13.8 billion worth of financial irregularities and embezzlements in the FBR for the period 2005 to 2008.
“The FBR is shy of giving us access to the systems and if it continues denying access, I will bring its accounts under observation and (make case of) non-production of record,” said Auditor General of Pakistan Akhtar Buland Rana. He said the matter has become serious as even the FBR chairman has not responded to my letters.
According to Articles 169 and 170 of the constitution, “The auditor general shall audit the accounts of any body or authority established by the federation or provinces… The auditor general shall determine the extent and nature of such audit.”
The powers and functions of the auditor general were further explained through the 18th Amendment in the constitution after certain bodies refused to allow access to their accounts.
Director General Audit Iftikhar Hussain said even the Law Division was of the view that the FBR cannot stop the auditors from performing their constitutional obligations. He said no one knew how the FBR was charging taxes and “settling matters with taxpayers”.
FBR Chairman Ali Arshad Hakeem stressed that he will give access only if the law permits. He said that giving access to the auditors will be unfair as taxpayers will be subjected to audit one after another. He suggested that the auditor general should focus on informal sectors of the economy instead of performing audit of the corporate sector.
However, his stance was rejected by PAC, which asked the tax officials not to create hurdles and instead facilitate the audit officials. Chan directed the FBR chairman to provide all relevant record to the auditors immediately.
Recently, the National Accountability Bureau (NAB) stopped the FBR from illegally waiving taxes of Rs47 billion in favour of telecom companies, saving the exchequer from a huge loss. There were reports that former FBR chairman Mumtaz Haider Rizvi, who was sent on forced leave in July, also unlawfully created two interim posts in the board for allegedly minting money.
It was for the first time in almost four-year tenure of the current PAC that members openly talked about bribery in a government department for postings and transfers. The PAC members asked about “the prevailing rate for appointment on a key post in the customs and other departments”. The term ‘speed money’ was particularly used by them.
“Why are you asking this question as everybody knows what is the speed money in the FBR,” remarked the PAC chairman when Hamid Yar Hiraj of the PML(Q) asked about the prevailing rate of appointment as principal appraiser in the Customs.
The committee also questioned the FBR chairman about his unpreparedness and ‘disinterest’ in the audit affairs. It gave a one-month deadline to the chairman for improving the accounts with a warning to come prepared next time.
Published in The Express Tribune, August 7th, 2012.