PRIME Minister Shehbaz Sharif, on Tuesday, directed the hiring of a foreign consultant to modernize the Federal Board of Revenue (FBR), indicating a departure from the previously approved restructuring plan. The consultant will be hired to suggest plans for modernization and digitization of the FBR, aiming to eliminate physical contact between tax officials and taxpayers.
The decision to hire a foreign consultant effectively means no immediate implementation of the restructuring plan approved by the caretaker Government at the instance of the then Finance Minister Shamshad Akhtar that envisaged separation of the Customs from the revenue collection mechanism. The plan was, however, opposed tooth and nail by officers of the FBR and was put on hold by the Election Commission of Pakistan (ECP). No doubt, successive governments contributed their share towards improvement of the working of the FBR, which is delivering despite many odds and a challenging economic environment. However, in view of the fact that the country is no longer able to ensure required external inflows to manage affairs of the economy, it has become a must to reform the FBR and take steps for expansion of the tax net. For this to happen, the staff and officers of the FBR will have to change their attitude and extend cooperation for all measures aimed at overhauling working of the institution. Why is there resistance to plans like installation of scanners for monitoring various units despite the fact that absence of such a mechanism is inflicting tax losses worth billions of rupees? Why has FBR perennially failed to enforce even symbolic tax on retailers who are, otherwise, earning handsomely? Elimination of physical contact between taxman and taxpayer as well as digitization offer a solution to most of the issues hindering a meaningful increase in tax collection and therefore, need to be implemented on a fast track basis.
