ISLAMABAD: With appointment of Rashid Mahmood Langrial, a BS-21 officer of Pakistan Administrative Service (PAS) as Chairman Federal Board of Revenue (FBR) poses serious challenge for digitalisation of the tax machinery and ensuring smooth sailing of the IMF program.
Prime Minister Shehbaz Sharif has grilled the former Chairman FBR Amjad Zubair Tiwana so much that he had no other choice but to seek early retirement.
Mr Tiwana, a grade 21 officer of Inland Revenue Service (IRS) was appointed as Chairman FBR during the tenure of last Pakistan Democratic Movement (PDM) led regime when Ishaq Dar was holding the charge of Minister for Finance. Now the appointment of Langrial demonstrates that the premier has removed the choice of former finance minister Ishaq Dar and made appointment of his choice at the FBR.
First of all, there is immense resentment among the ranks of the tax collection machinery with increase sense that both of the services officers belonging to IRS and Customs groups were ignored by the incumbent regime. Although it’s at the discretion of the premier, there is some resentment among the FBR officers.
Now the new Chairman FBR will have to restore their confidence and built up a team to fulfill the daunting task for displaying highly ambitious tax collection target of Rs 12970 billion on June 30, 2025. If there will be any shortfall in quarter then the International Monetary Fund (IMF).
However, if there is any shortfall in the quarter, the International Monetary Fund (IMF) might prescribe unveiling a mini-budget during the current fiscal year.
Digitalisation of the FBR appears to be a top priority for the current regime. However, too many cooks spoil the broth. There are confusing signals as the government has constituted multiple committees, each with the mandate to digitalise the FBR and simultaneously expand the narrow tax base. Unfortunately, there is a lack of coordination among these committees.
On 22nd November 2023, the Chairman of FBR, in compliance with a decision by SIFC, notified the formation of a technical committee for data integration aimed at broadening the tax base and transforming the IT infrastructure of FBR. The committee is headed by the Chairman of NADRA and includes officers from FBR, NADRA, and the CEO of PRAL.
Meanwhile, the government, through Karandaaz, hired McKinsey & Co. to prepare a roadmap for the digitalisation of the FBR. The McKinsey team has been working on the project since May 2024 and is expected to submit its report on how to digitalise the organisation soon.
Most recently, on 4th August 2024, the Prime Minister’s Office constituted another Task Force on the Digitalization of FBR, headed by the Minister of State for Finance & Revenue. This task force is expected to submit its recommendations within one month
Furthermore, the FBR has its own Information Technology Wing, a separate Digital Initiatives Wing, and a Reform & Modernisation Wing. Additionally, Pakistan Revenue Automation (Pvt) Ltd (PRAL) continues to operate as a wholly-owned subsidiary of the FBR, catering to the organisation’s IT requirements
Before speculating on the effectiveness of all these wings, committees, companies, and task forces in digitalising the FBR, let’s first examine the current status of FBR’s digitalisation efforts.
It’s important to understand where the actual problem lies. A significant impediment for the FBR is the lack of enforcement and data collection by other organisations. No authority has taken responsibility for regulating the retail and wholesale sectors, allowing these businesses to operate without adequate oversight and regulation.
If these businesses were regulated professionally and data was available with the relevant departments, the FBR would be able to use that information for registration and enforcement, as it has done with other available data. Similarly, DISCOs have consistently failed to update their data, and many commercial and residential electricity connections are still not registered under the current names.
