Revenue affairs: Shabbar Zaidi not coming, Haroon Akhtar doubtful despite PM’s offer

ISLAMABAD: Prime Minister Imran Khan is keen to inject his economic team with some new blood to revive fortunes of the country.

It’s final now that Shabbar Zaidi is not coming back as FBR chairman. Haroon Akhtar was offered the position of special assistant to the PM on Revenue. But here an important cabinet member is not comfortable. Informed sources said that Prime Minister Imran Khan was really impressed from Haroon Akhtar when the two met twice last month. Initially, they had a one-on-one meeting, which was later joined in by the cabinet member. A few days later, the prime minister again invited Akhtar — this time to meet with his entire economic team.

Sources said that the prime minister had offered Haroon Akhtar to join his team as head of the revenue side. The premier was not satisfied with the revenue collection and wanted a dynamic person who would help his government in significantly increasing the tax revenue collection which during the initial year of the government showed negative growth whereas in the present year it shows an increase of 16% but yet far below the target set. However, the PM’s offer to Haroon Akhtar has not yet materialised. Many do not know what has happened and whether the prime minister has changed his mind.

Sources said that the cabinet member was ready to have Haroon Akhar as FBR chairman but not as a minister in charge of revenue. The member does not want to share his domain with anyone. Earlier Hammad Azhar could not stay as revenue minister because of the same reason. Akhtar, who was Special Assistant to PM on Revenue with the status of the federal minister during the last PML-N regime, would be unwilling to join the post of FBR chairman. Who will be the new FBR chairman is another major challenge before Prime Minister Imran Khan.

PM Office sources confirm that Shabbar Zaidi, who is on long leave, has verbally conveyed to the prime minister that he is not coming back. Amid the government’s inability to find Zaidi’s replacement, the FBR faces a massive tax shortfall of Rs325 billion in the first eight months (July-Feb) period of the current fiscal year. Following the departure of Zaidi on medical leave, the government had appointed Nausheen Javed as FBR chief on acting charge basis.

According to a recent story by Mehtab Haider, senior economic correspondent of The News, the cabinet member wants to be consulted before the appointment of the FBR chairman as the post should go to a person who is competent enough to deliver. The FBR during the July-Feb period has collected Rs2,714 billion. The revised downward target for the said period was Rs3,039 billion, so the shortfall stood at Rs325 billion. The shortfall has been increasing with every passing month.

According to Mehtab Haider’s story, “At the existing pace, the revenue shortfall might rise to over Rs700 billion by the end of the current financial year.” The FBR had set a tax collection target of Rs5.5 trillion on the eve of the budget for 2019-20 but after completion of the first review and release of the second tranche under the IMF programme, the government had slashed down the FBR target in writing from Rs5,555 billion to Rs5,238 billion.

Before coming to power, Imran Khan had promised that he would double the tax collection within one year of his rule. However, it did not happen. Instead, the 2018-2019 fiscal year ended with a huge embarrassment for his government as the tax collected by the FBR in that year was even less than what was collected a year before. In order to change the things for better, the prime minister brought in Shabbar Zaidi as FBR chairman but he too left apparently because of health reasons. There were, however, unconfirmed media reports about differences between Zaidi and a cabinet member.

While the FBR and tax collection continue to be a headache for the government, a report by an English daily on Tuesday disclosed that the government’s broadening of tax base campaign has fallen flat as only 2.5 million people have filed annual income tax returns against 6.2 million National Tax Number (NTN) holders that shows the weakening writ of the tax machinery.

The report said that return filers were also 278,581 or 11% less than the last tax year despite the government’s tax amnesty scheme and conceding ground to traders in the hope of bringing them in the tax net. The report added that the tax base shrank under the watch of outgoing FBR Chairman Shabbar Zaidi, who had been brought in from the private sector to oversee reforms.