Tax collection drops after massive reshuffling in FBR

Shake-up just before year-end may make it impossible to meet revenue target.


Our Correspondent May 16, 2013
According to FBR documents, in the first 15 days of May it collected Rs42.3 billion in taxes, lower by Rs10.2 billion or 19.4% over the same period in May last year. PHOTO: FILE

ISLAMABAD:


The country’s revenues have dropped by about a fifth, sparking fears of missing the three-time revised target, as unprecedented transfers and postings in the tax collecting body allegedly on “personal liking and disliking” have undermined morale in the organisation.


The massive reshuffling in the middle of budget-making process has not only slowed down finalisation of budget proposals, but is also in violation of Supreme Court’s ruling in Anita Turab case, said a communiqué in the FBR.

According to FBR documents, in the first 15 days of May it collected Rs42.3 billion in taxes, lower by Rs10.2 billion or 19.4% over the same period in May last year. All taxes recorded a decline and there was no exception.



Collection of federal excise duty dipped 93.5%, sales tax collection decreased 38.6%, income tax 21.2% and customs duties 9.4%.

“The ‘ill health’ of revenues required consolidation and least disturbance in the administrative machinery at this critical stage,” the communiqué told the FBR chairman.

The shortfall in revenues is the result of changes in one of the most important organisations on “personal liking and disliking”. For instance, just six weeks before the close of fiscal year in June, 40 officials of the FBR were transferred by Chairman Ansar Javed, who has got an extension in service. Javed was not available for comments.

FBR’s Member Inland Revenue Raza Baqir, who is responsible for 90% of tax collection and chief commissioners of Karachi, Lahore, Peshawar and Rawalpindi have approached courts and got stay orders against their transfers.

On Thursday, the Islamabad High Court summoned the FBR chairman in next hearing. The chairman has been asked to explain why he was making transfers in violation of the apex court ruling in Anita Turab case.

In that case, the apex court ruled that officials should not be transferred before a specific period and if he or she has to be transferred the reasons must be recorded in writing in the transfer notification.

At present, about a dozen FBR officials are fighting their cases in courts and the FBR is practically running on stay orders, according to the officials.

FBR officials, who at this time of the year should have been busy with preparing next year’s budget, are concentrating more on court cases to get justice after they were prematurely transferred without any justification.

Traditionally, the government imposes a ban on transfers and postings after March every year aimed at allowing the tax body to focus on revenue collection and next year’s budget.

The communiqué stated massive reshuffling is apparently without any cause or reason and appears to be primarily motivated by personal liking, disliking, biases and prejudices which offends the transfer policy prescribed by the Establishment Division and reinforced in Anita Turab case.

One of the petitioners told The Express Tribune that the command chain in the FBR was broken, uncertainty was prevailing and the transferred officials were mentally disturbed.

The communiqué warned that inexplicable transfer orders are fraught with risk which will adversely affect the drive launched to increase tax collection. It added such a major shakeup at the close of the fiscal year will definitely cause grave dent to federal revenues, which will affect revenue generation and make it impossible to touch the psychological barrier of Rs2 trillion.

Against the original tax target of Rs2.381 trillion, the FBR has revised it downward to Rs2.05 trillion. Any shortfall in collection will lead to a low base and for achieving next year’s target the government will have to impose more than required taxes, the officials warned.

Published in The Express Tribune, May 17th, 2013.

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COMMENTS (3)

Tahir Khan | 8 years ago | Reply

OK,the Court has granted stay,Let FBR now collect the target that was set ie Rs 2318 Billion

I project that FBR will collect less than Rs 2000 billion.

Usman | 8 years ago | Reply

Anyone expecting any change with PMLN in power is bound to be deeply disappointed, lets not forget PMLn was in power in Punjab, and we all saw what became of that.

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