KARACHI: Nisar Muhammad Khan has assumed the office of Chairman Federal Board of Revenue (FBR) on November 17, 2015 while postings of Nasir Masroor as Member Customs FBR, Rehmatullah Wazir as Member IR Policy FBR, Dr. Muhammad Irshad as Member IR-Operations FBR and Waqar Ahmad as Member Admin FBR have also been notified.

The change of guards as the highest office of the revenue body brings about several challenges for a seasoned officer like Nisar Mohammad Khan.

Chairman FBR has arrived in Karachi Tuesday evening and he will be having a busy schedule for Wednesday i.e. November 18th, which include introductory meetings with trade bodies.

Sources said that Khan’s goodwill also convinced World Bank and IMF with him being in the chair. Khan has been instrumental in rationalizing the exemptions regime, which also has been a recommendation   by the donor agencies.

Nisar Mohammad Khan has headed critically important and sensitive formations; he had been Collector PaCCS twice and every time he was posted there when corruption and revenue leakage had reached alarming levels.

Sources said that any significant reshuffling in FBR is not on the cards as all the members had been posted with the consent of Chairman FBR Nisar Mohammad Khan. Moreover, senior level postings in Customs were notified on his recommendations as Member Customs. However, there may be some movement in Inland Revenue Service.

Increase in revenue collection is the prime challenge facing the new Chairman while elimination of smuggling will be the area of focus.

An official said SRO 1125(I)/2011 was largely being misused causing huge revenue loss to the exchequer and Customs despite having reasonable evidence could not take punitive action against these elements because of jurisdiction constraints.

SRO 1125(I)/2011 provides duty exemptions on import of certain products to manufacturer importers having manufacturing facility. Inland-Revenue registers importers as manufacturer importers or commercial importers.

There is an established practice that several commercial importers get them registered with IRS as manufacturer importers through the backdoor and import large number of consignments on reduced duty as available vide SRO 1125(I)/2011. These importers shutdown their firms within months and again get themselves registered with IRS with a different profile and the cycle goes on.

Prominently, a huge quantity of cloth imported by commercial importers find their way in the country cleared on paying of duty as 4.0 percent while commercial imports invite 7.0 duty.

Another menace that is on the top of agenda for the new Chairman is ‘fake refunds’. Several elements with the connivance of officials are draining out the exchequer receiving refunds on fake and flying invoices.