More bureaucracy

The federal bureaucracy has only one answer to every problem in the country: more bureaucracy. When the finance minister announced that the government wanted to give the Federal Board of Revenue (FBR) the power to access banking data of every person in Pakistan, we, along with the Senate finance committee and a large majority of the country’s business community, reacted with concern. It is understandable that the FBR will need data to crack down on tax evasion. But we did express our view that not enough safeguards for privacy were built into the system.

After apparently having mulled over the matter for several days, the FBR has an answer: only its chairman and board members will be granted access to banking data. Is that really the solution to this issue? Granting the power to access data to the FBR where there is massive scope for the data to be misused, while not giving the power to the NADRA data analysts, who are actually creating the algorithm designed to track down tax evaders and estimate their tax liabilities? This so-called solution only serves to exacerbate the impression that the FBR does not really want the data to go after tax evaders, but simply to use it to allow corrupt officials to blackmail people with substantial sums of money.

The theory behind the need for the bank account data being made accessible to the FBR was to allow it to complete the algorithm it is trying to construct that would not only identify potential tax evaders, but also estimate accurately how much they should be paying in taxes. It is an attempt to use Big Data the right way. The algorithm, however, is not being constructed by the FBR. It is being constructed by NADRA, an institution that has a much better track record of handling people’s personal data and, therefore, has a much better public profile. If the finance minister is serious about catching tax evaders, he would do well to hand over the data to NADRA, which the public trusts, and not the FBR, where this information can be misused.

Published in The Express Tribune, June 27^th, 2013.

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