The High Power Board (HPB) is scheduled to convene on May 17, 2024, to deliberate on the promotions from BS-21 to BS-22 within Pakistan’s financial institutions. The meeting has sparked controversy following allegations that Chairman FBR, Amjad Tiwana, has misused the names of sensitive agencies to disseminate false reports. These reports have ostensibly led to the marginalization of senior officers in both Customs and the Inland Revenue Service (IRS), impeding their advancement to BS-22.

The controversy centers around the fact that many of these officers, who are more senior than Tiwana himself, have been unjustly categorized to halt their promotions. Tiwana, who is currently a BS-21 officer, is accused of only categorizing those officers into A caregory junior to him, raising questions about the fairness of the process.

In response to these actions, a group of IRS officers is reportedly taking legal action. They are approaching the Islamabad High Court to challenge the purportedly self-imposed categorization by Tiwana, which has relegated them to the Admin Pool—a move they fear could jeopardize their careers and chances of promotion.

It is interesting to note these officers sent to Admin Pool were posted on their last positions on the basis of intelligence reports. One of those was given Sitara Imtiaz even.

The second phase of Chairman Tiwana and government’s plan to transfer and categorize BS-20 and BS-19 is shelved, and these transfers and postings will happen in July as per routine.

Amidst this backdrop, sources from the Ministry of Finance have indicated that the establishment of a separate Federal Board of Customs is expected to be announced in the upcoming Federal Budget. This new board is anticipated to provide a distinct platform to assess the performance of Customs and the IRS as separate entities.

The issue is further complicated by the performance metrics of tax collection. Customs is responsible for collecting Sales Tax and Income Tax at the import stage and has successfully met its targets. However, the credit for this performance is reportedly being attributed to the IRS, leading to a skewed representation of the respective departments’ efficacy.

The International Monetary Fund (IMF) has also weighed in, exerting pressure on Pakistan to increase direct taxation. This comes in the wake of criticisms that the IRS has not sufficiently expanded the tax net, relying predominantly on indirect taxes—a majority of which are collected by Customs.

This unfolding situation presents a complex challenge for Pakistan’s financial governance, with potential implications for the country’s fiscal policies and international economic relations.