KARACHI: In a landmark move aimed at enhancing efficiency and curbing corruption, Pakistan Customs is on the brink of implementing major reforms, pending approval from the Prime Minister. The Inland Revenue Service (IRS) has already rolled out its transformative plan, setting the stage for significant changes within the Customs framework.
The upcoming reforms will see the consolidation of numerous collectorates and directorates. These additional posts were originally created to accommodate promoted officers but are now considered redundant. The Intelligence and Investigation (I&I) Anti-Smuggling Organization (ASO) will be integrated into Customs Enforcement, ensuring a more streamlined approach to anti-smuggling operations. Meanwhile, the Customs Intelligence appraisement role will remain intact, continuing its critical function.
A rigorous anti-smuggling campaign is currently in full swing, with strict measures in place to ensure no exceptions are made. This initiative underscores the government’s commitment to eradicating smuggling activities and enhancing the integrity of Customs operations. In response to persistent reports of corruption, the government has decided to shut down the Directorate of Customs Intelligence. The Customs Intelligence department will be merged into the broader Customs Department. Officers currently serving in the Directorate will be reassigned to various departments within Customs and other relevant sectors.
Following the merger, the Anti-Smuggling Division of the Enforcement Collectorate will take charge of anti-smuggling operations across the country. Sources indicate that the merger process is advancing rapidly, with the Directorate of Customs Intelligence expected to cease operations in the coming months. The Federal Board of Revenue (FBR) has prepared a comprehensive report detailing these changes, which will be presented to senior government officials for final approval.
The reforms are part of a broader effort to tackle organized crime within government departments, directorates, collectorates, police stations, and secretariats. This crackdown has instilled a sense of urgency and concern among officers and officials. Under the direct supervision of COAS General Asim Munir, the implementation and monitoring of these reforms are being overseen by Military Intelligence, with support from the Inter-Services Intelligence (ISI) and the Intelligence Bureau (IB).
Meanwhile, the Inland Revenue Service Officers Association (IRSOA), representing over 1,300 officers responsible for collecting more than Rs. 9 trillion annually, has voiced serious concerns regarding the Federal Board of Revenue’s (FBR) recent “Transformation Plan.” In a statement, the IRSOA criticized the Transformation Plan, stating it is not an internally developed initiative of the FBR. The task force, which included IRS officers, was only involved in data analysis and identifying tax gaps, not in formulating the recommendations now featured in the plan.
Since the appointment of the new Chairman, the IRSOA has repeatedly sought meetings to discuss challenges faced by its members. These requests, including formal written submissions, have been ignored, leaving the association’s concerns unaddressed. The IRSOA asserts that IRS officers should be treated on par with other service groups. The implementation of a 60/40 Peer Rating system and constant references to integrity have demoralized an already overstretched workforce. Performance assessments should be based on objective criteria, such as new taxpayer registrations and audit outcomes, rather than subjective peer evaluations. The 60/40 formula is seen as discriminatory compared to other civil service disciplines. Additionally, IRS officers are being unfairly excluded from opportunities for career progression, training, and other benefits, leading to deep demotivation.
Despite demonstrating integrity and efficiency, IRS officers are hindered by a work culture focused on excessive reporting to seniors. The Transformation Plan fails to address the basic needs of junior officers, such as adequate salaries, logistical support, transportation, and accommodation, which are essential for any transformation to succeed. The IRSOA highlights disparities in how integrity issues are handled between the IRS and the Pakistan Customs Service (PCS). The association demands equal treatment and transparency. Hiring private sector auditors is also a major concern due to accountability issues and potential data leakages, as seen with the Pakistan Revenue Automation Limited (PRAL). Field units are burdened with non-productive tasks and lack essential logistical support, often funding their activities from personal resources.
The IRSOA has outlined specific demands, including aligning salaries and allowances with other service groups, providing adequate logistical support for field enforcement, and ensuring necessary staff and amenities for field formations. They also call for the devolution of power and authority to empower field officers and prioritize career progression and training opportunities, including international placements. The IRSOA believes that hiring external auditors will lead to accountability issues and potential data breaches. They argue that auditors should be recruited from within the organization to ensure responsibility and accountability. The current plan, which repeats failed ideas of the past, could lead to corruption scandals and reputational damage, for which the current Chairman would be held responsible.
The IRSOA stresses the importance of aligning the digital strategy with FBR’s objectives to enhance taxpayer experience and operational efficiency. Improved data analytics and intelligence sharing are essential for increasing tax revenue. Access to critical data must be institutionalized and decentralized to relevant stakeholders. The IRSOA identifies the lack of empowerment for field units as the most critical failure of the Transformation Plan. These units are overburdened with unproductive tasks and lack the logistical support necessary to perform their duties effectively. The plan must focus on empowering these units, redesigning job descriptions, and evaluating performance based on clear and relevant metrics.