The caretaker government has reportedly accelerated implementation of its plans to restructure the Federal Board of Revenue amid growing opposition from the FBR as well as major political parties. Interim Finance Minister Dr Shamshad Akhtar plans to implement the FBR reform program through a presidential ordinance before the end of this month – 10 days before the elections, media reports suggest. According to some reports, she believes these reforms will increase tax revenue collection from the current 8.5 percent to 15 percent in a few years. The FBR bureaucracy is against the plan, which was approved by the army-backed Special Investment Facility Council earlier this month. The bureaucracy of the FBR believes that their unlimited discretionary powers will be curtailed.
Politicians are opposing it on the grounds that the interim setup does not have the mandate to implement policies that have long-term and far-reaching consequences. Therefore, they want to leave the decision of restructuring the FBR to the next elected government. Although there can be no two opinions on the constitutional limits of the mandate of the interim setup, the opposition by the FBR officials appears to be motivated by selfish reasons.
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Even if reports claiming that Stib intervened to bridge differences between the minister and top revenue officials, enacting such important reforms through an ordinance would be a big step. There is no doubt about the urgency and importance of reorganization of the board, separation of policy from tax collection, introduction of technology and reduction of discretionary powers of FBR to increase collections along with introduction of technology and tax fairness. But it is better to leave this task to the next elected parliament. If the caretakers go ahead with it, the reforms will lose their legitimacy, and the new government may have to withdraw them before the plan can be implemented.
The concerns raised by the leaders of Muslim League (N) and People’s Party regarding this project are not wrong. If Dr. Shamshad Akhtar wants the board to be restructured, she should work more broadly on the reform blueprint and leave the legislation and implementation to the incoming administration. Once a policy is mired in controversy, it is never easy to move forward with it.
