KARACHI: Pakistan government is considering revamping and restructuring its revenue collection body Federal Board of Revenue (FBR), wherein some of FBR powers will be devolved to other ministries in the coming months, Customnews.pk has reliably learnt.
According to details, Tariff Policy will be assigned to Ministry of Commerce while Anti-Smuggling operations will be assigned to Ministry of Interior, as both Prime Minister Imran Khan and Finance Minister Asad Umer are not at all satisfied with the FBR as an organization, which they believe is meant for personal gains of individuals.
Imran Khan in a speech in February this year had targeted the Federal Board of Revenue (FBR) for lacking the capacity and failing to take institution-building initiatives. “Failure to take such initiatives has always resulted in the imposition of indirect taxes, which negatively affects the relevant stakeholders including taxpayers and industrialists,” Khan added.
A senior FBR officer said it was actually the poor performance of Inland Revenue Service (IRS), which was reflected on Customs. “It is high time that Customs have a strong mouthpiece in FBR besides creating a separate Board for themselves,” the official added.
Pakistan Customs Service (PCS) is the prime collector of direct sales tax on import stage, but this collection goes into the credit of IRS.
Inland Revenue Service (IRS) is known as the white elephant within the FBR as it employees the largest number of personnel, while the performance in terms of revenue collection and reforms has been severely below average, which can be gauged by the failure of subsequent amnesty schemes and flood of indirect taxes. There has been no mentionable broadening of tax base.
At a briefing to PM Imran Khan early in November 2018, Pakistan’s Finance Minister Asad Umer expressed dissatisfaction over the FBR’s performance.
The FBR could collect only Rs1.1 trillion in taxes in first four months of the current fiscal year and fell short of the revised target by Rs68 billion. The growth in revenue collection was less than 7 percent. The only positive aspect was the increase in customs duty and regulatory duty collection as there was a shortfall in all other taxes.
During the briefing, the PM was informed that Customs authorities had enhanced enforcement measures, which led to the seizure of Rs36 billion worth of goods in the past 15 months.
“The government’s success and failure hinges on the FBR’s performance,” Asad Umer had said adding the government would separate tax policy from operations and a tax policy board would be constituted.
An official said Customs had been quite inefficient since long, however in the past couple of years certain so called ‘honest’ officers were exposed.
Chief Collector Appraisement South Abdul Rasheed Shaikh has been in news for the misuse of Green Channel facility, interference with the work of Collectors and protection to unscrupulous elements in the name of trade facilitation.
Moreover, targets were artificially achieved through taking advance duties and taxes from importers and traders.
Director General Customs Intelligence & Investigation Shaukat Ali remained the facilitator of smuggling, and he is facing several departmental and NAB inquiries, which also deferred his promotion in BS-22. Additional Director I&I Karachi Ali Zaman Gardezi was known to be an honest officer, however, he also was exposed as his involvement in questionable activities were noted. Member Customs Muhammad Zahid Khokhar comes under fire for his failure to enforce writ of Customs.
It may be mentioned here that for the current fiscal year, the government has already revised downward the annual target to Rs4.398 trillion.