- Taxmen must be taken care of
The current government in its resolve to steer the nation towards economic viability and development on the basis of domestic revenue resources and debt servicing has set a target of Rs5,500 billion for the Federal Board of Revenue in the current financial year. It is a herculean task for the FBR to achieve due to the inaction of the government in acting decisively against the rampant corruption, and incompetence of the bureaucracy within FBR on one hand, and on the other hand the government’s failure to listen to the genuine demands of the FBR officers. An attempt is made to find the reasons due to which FBR is likely to miss its revenue target:
Broadening of Tax Base: Pakistan has the lowest tax-to-GDP ratio in the region. For the achievement of the target improvement in this aspect cannot be overlooked. This aspect of taxation would require the following interventions:
Centralised structure: There is a worldwide trend of public service delivery through decentralisation and at the doorstep. The Federal Board of Revenue in its last restructuring during the Musharraf regime centralised the tax machinery structure, doing away with the offices in the peripheries. It made hurdles in facilitating the taxpayers at their doorsteps on one hand and on the other hand facilitated consultancy services rendered by the officials within the office premises on a large scale. The offices and infrastructure at the peripheries were made redundant. Recently an effort was made for revival of taxation services at the tehsil level for broadening the tax base, strengthening the enforcement and audits in addition to tax facilitation through the concept of district taxation offices with its sub offices at the tehsil level. However, the funds required were denied to the FBR by the Finance Division. The bureaucrats there thought that construction of sewerage line, bricking already cemented streets, repair of roads for non-tax compliant nation on borrowed money was important than provision of funds on emergency basis for the renovation and construction of tax offices at the district and tehsil level for initiating an effective drive for revenue collection and tax broadening.
The assigned revenue target is achievable if the points given below are considered and redressed on emergency basis
Logistics: It is one of the unattended issues due to which FBR is prone to corruption. The per official space available in the FBR’s field offices is the smallest in the world and much less than that prescribed by the Public Works Department. The pace of work on the under construction infrastructure is slow. The field force cannot be operationalised fully due to acute shortage of offices, accommodations, vehicles, fuel and so on. Misuse of monetisation facility is very common and almost all BS 20 and above are in the possession of official vehicles, in addition to the ones with the retired officers. The official accommodations available for the service at various stations are very few and in a pathetic state. An officer with family has to live in a portion of a rented house or in a room alone to make both ends meet. In short, availability of the required logistics would serve as a key factor for broadening of tax base in addition to achievement of assigned revenue target.
Tax officer to population ratio: The tax officer to population ratio is very low for the region. The government is generous to sanction posts for the general cadres of the bureaucracy but not willing to sanction adequate posts in the IRS for effective broadening of tax base and achievement of the herculean target. The dream of effective taxation at tehsil level would materialise only if the tax officer to population ratio is improved, enabling FBR to identify potential taxable activities at the tehsil level for broadening of tax base and collection of taxes.
Quality of Work: The human resource in the organisation would be able to deliver if working under a refined supervisory officer who polishes and appreciates the skills of the workforce. The achievement of the assigned revenue target would require the government to consider this.
Corpses without coffins: Very unfortunately, most officers in BS 22 in the IRS are dead wood with no interest in the service, except their retirement benefits and post-retirement opportunities. The field officers have coined the word corpses without coffins for them as their contribution to improvement of the working conditions or welfare of the organisation is non-existent. Doubts arise on the sanctity of the high-powered boards and i-reports on the basis of which these officers are elevated.
Rampant corruption: Mere threats from the government without decisive action have added to the courage of the incorrigible and the corrupt. Their motive is to earn more for securing their future. Achievement of the assigned revenue target would be a mirage if this aspect is not checked.
Rampant consultancy: The FBR recently issued a circular imposing a ban on consultancy services by its personnel. It also transferred staff in Karachi, Lahore, Islamabad, Rawalpindi which ceased the clientele of the officials posted in these stations. It has been learnt that the head of the organisation is under immense pressure from various sources for the reversal of the orders in addition to not issuing further posting orders to curb this menace of consultancy. The orders made in small stations were cosmetic.
Quality of human resource: Personnel needs to be in high spirits. This would be possible if they are rewarded for their contribution to the service and the objective of the organisation. The achievement of the assigned revenue target would remain a myth if this is ignored.
Lowest paid human resource: The World Bank in its FBR reforms project recommended three basic pays for the personnel posted in the field formations for controlling corruption and promoting efficiency. The government restricted this recommendation to double basic pay and it continued for some time. This additional basic pay was freezed in the previous regime, killing the purpose for which it was introduced. Most of the human resource posted in FBR are highly skilled and the remuneration they receive at the moment is the least in the region. Ironically the provincial bureaucrats were incentivised with an executive allowance equivalent to one and half times basic pay. Many talented officers are leaving the pool of corruption created by the government for a clean and better future abroad. The assigned revenue target could be achieved only if the workforce is incentivised by introducing a special pay package.
Promotion path: One demoralising factor is the absence of a promotion path. In pursuance of the Musharraf regime reforms, officers were inducted in the Inland Revenue Service in bulk without taking their promotion path into consideration. This aspect could be a possible reason for the brain drain of the organisation of people who see a better future outside the organisation or the country. Morale of the personnel of the organisation could be improved through provision of a decent career path.
The gist of the discussion above is that the assigned revenue target is achievable if the above points are considered and redressed on emergency basis enabling the plagued organisation to work effectively for the construction of Naya Pakistan as envisioned by the Prime Minister.
