IMF technical mission talks for reforms FBR

ISLAMABAD: The IMF’s technical mission on FBR’s tax administration has kick-started virtual parleys with tax authorities in order to finalise recommendations for undertaking future roadmap for reforms.

It is yet to be seen how the IMF recommends administrative changes as whether the Fund supports chairman and vice chairman one belonging from Inland Revenue Service (IRS) and second from Customs Group or it favours the existing structure where chairman will be heading the department with the help of supporting members.

The FBR’s administration is going to convince the IMF that the tax machinery will continue to remain into public sector domain under the new restructuring plan.

The FBR’s top officers had opposed tooth and nail on the proposal given by Dr Ishrat Hussain-led Institutional Reforms Committee to grant autonomy to the FBR. However, now the committee brought changes into its initial proposal and its is finding ways and means to keep the FBR into public sector domain for protecting perks and privileges of baboos and grant autonomy on pattern of State Bank of Pakistan.

The two-week long parleys have been underway online because of COVID-19 pandemic but this technical mission possesses much importance because it’s occurring at a time when the administrative reforms into FBR have become hot topic.

The World Bank and Dr Ishrat Hussain-led committee had already presented their proposals to introduce reforms into the FBR keeping in view increasing fiscal woes of the country and without improving administration the weaknesses cannot be fixed. The policy and administrative reforms are crucial to get the desired results. Earlier, the IMF’s technical mission recommended policy prescriptions to broaden the narrowed tax base.

Now the existing technical mission is talking about bringing reforms into administration side of the FBR. The administrative weaknesses are so acute and apparent as the FBR witnessed four chairmen in last two years. When there is uncertainty at the top, how the administration can be improved. For instance, the incumbent chairman had three-month tenure so how he would be able to deliver when he was not certain about his own future whether he would be able to stay or show the door anytime.

The administrative and political autonomy from the clutches of Finance Ministry will be quite crucial because at the moment the FBR chairman lost charm if the government did not grant him position of secretary Revenue Division. In such a situation, the FBR chairman’s powers are compromised substantially because he had to see towards Finance Ministry for running day to day affairs and for minor administrative changes into fold of tax machinery.

The FBR has so far implemented jurisdictional changes whereby they transferred major revenue potential cases into large taxpayers units (LTUs). The question arises how the regional taxpayer offices (RTOs) will remain effective and relevant after these jurisdictional changes?