Breaking the tradition: FBR chief hell-bent on challenging status quo

Hakeem wants to use his tech-background to root out tax evasion.

ISLAMABAD: Skills developed as an IT entrepreneur-skills like extraordinary technological savvy and the desire to do what could not have been done in last 65 years – has made Ali Arshad Hakeem a target for those who want to maintain the status quo to their benefits.

This challenging environment may worry any person wishing to do a professional job, but for Hakeem, who was appointed as chairman of the Federal Board of Revenue (FBR) in July this year, it is usual. Having a dynamic professional background in both the public and private sectors, Hakeem has seen many ups and downs in his professional life. Nothing was able to stop him from eventually grabbing prestigious posts in the public sector.

The son of a former director general Pakistan Rangers, Major General (retd) Hakeem Arshad Qureshi, he has overpowered many opposing forces in his formative years. He had started his career as a civil servant and quit the job after serving in the Central Board of Revenue (now FBR) for ten years.

Hakeem proceeded abroad to explore new avenues. He holds a degree in Business Administration Law. Hakeem also set up an IT firm – Accounting & Outsourcing (AOS). Interestingly, his firm had been hired by the FBR to replace manual system with the automated customs clearance system to stop revenue leakages.

After serving in the National Database and Registration Authority (NADRA) for about four years as chairman, Hakeem has probably taken over the most difficult task of his life. His goal is not only to catch roughly four million tax-dodgers, but actually building systems to stop the leakages on a permanent basis.

In a recent interview to Reuters, Hakeem was quoted as saying that if the war to catch tax cheats fails, he will have to go.

Dealing with vested interests is not something new for him. In NADRA, he successfully built IT systems that closed doors for bribery going on even in disbursements of stipends of Rs50,00 per month per person to the affected people of the earthquake in 2005.

The chairman has the will to widen the tax base; currently 0.8% of the population are registered tax payers, but the real question is whether he has full command and control over senior FBR officials as most of them oppose any change to the status quo.

Overpowering vested interests in FBR is an uphill task for successful development of these systems. These forces are not only creating problems by making half-hearted efforts to raise revenues, but they have recently challenged his appointment as chairman of the FBR in the Supreme Court.

Their plea is that he was made the chief of the body by superseding roughly 250 officers. The petitioner –Muhammad Ashfaq Ahmed – a member of group of officers of the Inland Revenue Service, also requested the court to bar Hakeem from launching the intended tax amnesty scheme.

He described the scheme as a ‘tax NRO’ which was being issued to benefit a chosen few at the cost of honest taxpayers and the entire tax system itself. The FBR chief wants to launch the scheme as he calls it a final chance for redemption before going after the evaders.

Observers believe that one of the reasons the officers of the FBR oppose the amnesty scheme is that it will, to a large extent, shut the doors to massive corruption going on in the FBR. The tax officials are blamed for their connivance with tax evaders, as their ‘unholy alliance’ benefits both parties at the expense of the country’s interests.

One may have a different point of view on the issue of tax amnesty scheme but credit should be given to the relatively young team, working to unearth tax evasion, for their excellent work in a short span of time.

Just to cite two glaring examples on how the country is looted with the connivance of tax evaders and corrupt officials, a man “Mian” who owns 630 vehicles and there is another person who owns 525 motorcycles; both gentlemen have neither a tax registration number nor do they pay a penny to the exchequer.

This information is not novel to the FBR. The only thing is different now, is the will to use this information.

Insiders say that the one of the reasons behind the falling tax to GDP ratio and increasing evasion is the FBR’s reluctance to use information technology to increase its revenues and the other is application of the information to the benefit of the country. They say this is what a technology savvy man can do properly. And that man is Ali Arshad Hakim.

The chairman’s genuine critics say that he should be given time to prove his mettle, especially after chartered accountants and DMG bureaucrats have failed to deliver.

Published in The Express Tribune, November 10^th, 2012.