Bad housekeeping

Lethargy is not only prevailing but endemic in FBR and symptomatic of dysfunctionality of the tax system as a whole.

Dodging the taxman is elevated in Pakistan almost to the level of a national sport, not quite on a par with cricket but not so far off it either. Tax is a universal burden and there are few that happily pay it in whatever form it comes. Those charged with the gathering of taxes are occasionally demonised, becoming hate figures, and the agencies they work for reviled. Be that as it may, governments everywhere need to gather taxes if they are to function adequately and provide the services that populations both need and expect. That process has never worked well in Pakistan, and the imbalances and inequalities in the taxation system and the processes by which taxes are collected have become shambolic, heavily politicised and massively corrupt. And the rot starts at the top.

The Federal Board of Revenue (FBR) is the apex tax-collection body in the country and one would have expected that it would be a model of probity in order to provide a credible role model to those it was attempting to extract taxes from. This is a false assumption. More than 200 senior officers of the FBR have not submitted their tax returns and a number of them do not even have national tax numbers. This has not gone unnoticed by the managers of the FBR, though their sudden realisation that bad apples are aplenty in the tax barrel suggests a willing blind eye being turned until but recently. Those who have not submitted their returns by June 16th are to be fined under the Income Tax Ordinance 2001. Finance Minister Ishaq Dar is also somewhat exercised about the matter and he has indicated that he is ‘not ready to tolerate any lethargy in this regard’. Indeed not, but lethargy is not only prevailing but endemic in the FBR and symptomatic of the dysfunctionality of the tax system as a whole. With the budget imminent, it is reported that mass scrutiny of the financial affairs of those in the FBR is also imminent and that disciplinary actions and transfers are likely shortly after the budget is published. Heads need to roll and the sooner the better.

Published in The Express Tribune, May 30^th, 2014.

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