Huzaima Bukhari &
Dr Ikramul Haq
Another small cadre of officers was inducted by government of Pakistan People’s Party as Assistant Collectors Sales Tax (BS-17). Following the IROs’ induction into the mainstream IRS cadre, this small cadre of officers also succeeded in getting inducted into the IRS. However, they have now reportedly been removed from the mainstream merit list and made ‘cost accountants’. Another group of officers comprises auditors who were inducted in FBR in BS-16. They have recently been promoted to BS-18. This cadre is also putting its best efforts to be part of IRS so that, like IROs, they could also be promoted to senior most slots. It is like looting and plundering where everyone is busy in grabbing its maximum share. Another group consists of BS-16 Inspectors Inland Revenue (IIR). They are either from the ranks or recruited directly by the FPSC. They have a better right to be promoted to BS 17 and 18 against their quota. So much so, officers from other departments, e.g., Railways and Postal groups, etc, — sarcastically called “Dubai Group” — were also inducted into the mainstream IRS. They should immediately be repatriated to their parent departments.
Consequent upon the concurrence of Finance Division for creation of additional posts in Inland Revenue Service (IRS) and Pakistan Customs Service (PCS) vide FBR’s sanction letter No 13(2)S-MIR/2012 and Finance Division vide Dy. No 341-FA(FBR)2014, the cadre strength of IRS and PCS with effect from February 7, 2014 was: IRS: BPS-22, 2; BPS-21, 47; BPS-20, 170; BPS-19, 255; BPS-18, 377; BPS-17, 378—total cadre strength 1229. PCS: BPS-22, 1; BPS-21, 18; BPS-20, 64; BPS-19, 133; BPS-18, 150; BPS-17, 101—total cadre strength 467. Lower cadre number is about 23,000 for IRS and PCS.
The current Chairman of FBR is from Pakistan Administrative Service. He is junior to many serving officers of IRS and PCS. The Prime Minister, according to media reports, had justified his appointment as Chairman (allegedly recommended by Principal Secretary to the Prime Minister Muhammad Azam Khan and backed by PTI’s strongmen like Pervez Khattak and Jahangir Khan Tareen) while talking to anchorpersons. The best thing the government of PTI can do is to revisit the seniority list of the IRS officers and take all possible steps to ensure that only the competent and better skilled officers are elevated to BS-20 and above.
The CSS officers, holding PhDs/MPhils/Masters from top universities of the world, should be promoted to next levels on OPS (own pay scale) basis. The PTI government may also consider reverting the IROs batch back to BS-16. They are currently working as Additional Commissioners (BS-19). This can be done on the basis of the Supreme Court’s order through which many senior police officers, working as DIGs and SSPs, were reverted back as inspectors and sub-inspectors in the police department. Furthermore, the PTI government needs to consider forwarding the case of undue promotions of IROs to the National Accountability Bureau (NAB). All those FBR officers who have been part of the process of the IROs undue promotions, should face a fair NAB enquiry. In the given circumstances, these are the minimum steps that the government must take to make FBR functional and effective, failing which it shall be dissolved and replaced with National Tax Authority — see details in ‘Overcoming fragmented taxation’ Business Recorder, October 10, 2018, ‘Case for All-Pakistan Unified Tax Service: PTI & innovative tax reforms’, Business Recorder, August 31, 2018 and ‘Doing business under scattered taxation’, Business Recorder, September 7, 2018.
The current performance of FBR depicts a very gloomy picture. It could collect only Rs 1.1 trillion in first four months of the current fiscal year thus falling short of Rs 68 billion with a revenue growth at less than 7 percent. The government has already revised the annual target downwards to Rs 4.39 trillion from Rs 4.44 trillion. If decisive measures are not taken, both short-term and long-term, the FBR may again face a huge shortfall of Rs 150-200 billion. Owing to such shortfalls, the budget deficit would widen to as much as 1.4 percent of the first quarter’s gross domestic product.
Major failures of FBR are because of lack of requisite human capital among its ranks. The PTI government should immediately make a rule that the non-CSS officers/ranker officers aspiring promotions to BS-20 must have a minimum 28 years of service at their credit. The same rule should also be applicable to the “Dubai Group”, if FBR at this stage is unable to repatriate them back to their parent departments for any reasons.
As per media reports, the FBR has, so far, not been able to frame simple tracking systems for tax evasion by various businesses such as cigarette manufacturers. Lack of requisite human capital and necessary skills made FBR unable to frame a simple one-page income tax return. These factors clearly indicate and prove the validity of the recommendation of the EEGT. Any organisation, including the FBR, cannot afford to ignore the EEGT; and if it does, its dissolution is justified beyond an iota of doubt but it should be for the better and not the worse!
(Concluded)
(The writers, lawyers and partners in HUZAIMA, IKRAM& IJAZ, are Adjunct Faculty at Lahore University of Management Sciences)
