In the early twentieth century
agricultural economy was at zenith in the Indo Pak sub-continent and the
erstwhile Indian Civil Service was created by the colonial powers for the
collection of revenue called at that time land revenue. For that purpose the
Indian Civil service was vested with magisterial powers to rule the colony.
However, with the passage of time, the agricultural economy and revenue went
into the background and supply of goods and services came to the forefront as a
major contributor to the revenue of the country and consequently its share in
GDP increased vis a vis the agricultural revenue.
It is pertinent to mention here that no system of district magistracy was
implemented in the United Kingdom itself. It was exclusively designed for a
subject nation to rule it with an iron hand. Much water has flown down the
bridges and we are an independent nation now. We need to seriously think that
still we need administrative paraphernalia designed for us by a colonial power?
This question has been taken up by the successive governments in the country
initially in 1973 administrative reforms by Zulfikar Ali Bhutto who created
District Management Group instead of the colonial Civil Service of Pakistan (CSP).
During the Musharraf regime, the executive magistracy regime was abolished and a
sincere effort was made to devolve powers to the local bodies, which rendered
the DMG rudderless for quite some time however, sooner they resorted to grabbing
the other governmental functions exercised by other services by hook or by
crook.
It is since that day we find the DMG running from pillar to post for the sake of
regaining its lost legacy. At times it would be at daggers drawn with the
provincial management services who think that after eighteenth amendment, the
federation has no authority to recruit and post officers for the provincial or
district setups and compelled the DMG to change its name from District
Management Group to Pakistan Administrative Service or at other times would be
issuing orders from the Establishment Division closing the doors of the federal
secretariat on other occupational groups particularly the Office Management
cadre. The group till date has not been able to declare its sanctioned strength
as its year wise inducted batches are promoted in bulk even in the high powered
boards.
Several provincial and federal services feeling aggrieved with domination of the
DMG at the expense of national interest were compelled to knock the doors of the
judiciary. The DMG (now PAS) was influential enough to post its officers as
registrars in the superior judiciary who ensured that no case shall be fixed for
hearing against their occupational group.
In the election campaign of the Pakistan Tehreek Insaf, the PAS was branded as
Patwaris and it vowed to cut it to its size. This slogan was a beacon of hope
for all the services of the federal and provincial governments that the PTI
government would create an enabling atmosphere for effective public service
delivery by choosing right man for the right job. It was also hoped that the
main facilitators in the loot and plunder of national exchequer by the previous
regimes will be brought to book. However, immediately after coming to power, the
same old faces were back with all the important assignments. They surrounded the
PM and diverted his attention towards other occupational groups to cover their
association and involvement in the loot and plunder of the country by the
previous regimes of Nawaz and Zardari.
The hopes of the occupational groups and the Provincial Civil Service for true
reforms were dashed when the Shahzad Arbab and Dr. Ishrat Hussain of the
erstwhile DMG were tasked by the PTI government for reforms without realizing
that the root cause of poor public service delivery is the DMG (PAS) itself. The
course of functional specialization has yielded dividends in the world but we in
the twenty first century still believe in tasking a generalist for bringing
reforms in specialized services. This act of the present government has not only
demoralized the workforce of the specialized services but has also affected
their performance.
The Federal Board of Revenue the only organization tasked with collection of
revenue was singled out as the main demon in the bureaucracy, and all the
attention of the present government was diverted towards this organization. This
organization has been doing its job as unsung heroes and has been able to bring
revenue collection to the level of four trillion plus in spite of numerous
challenges like shortage of offices, officers, staff, operational vehicles,
outdated I.T solutions and budget constraints. Despite systemic and structural
problems in the revenue system, FBR has been able to achieve average growth of
15% per annum in the five years (2013-2018), whereby tax collection doubled from
Rs.1900 billion in 2013 to Rs. 3800 billion in 2018, (though still low compared
to the tax potential of the country) the tax to GDP ratio also increased from
8.7% to 11.2% during the corresponding period. This growth in tax collection was
in an economy marred by low growth, declining exports, war on terror, political
instability, weak political economy of taxation and poor tax culture. Being
civil servants FBR implements tax policies and is not the initiator, but
some-how all the guns have been turned against them as the shortfall started
appearing in the assigned revenue targets this year little realizing that it was
the previous outgoing government which slashed the tax rates and increased the
tax exemption limit from 400,000 to 1,200,000. The current government was warned
that budget so announced was a trap to discredit the coming government with
economic failure and the changes need to be reversed if the target assigned has
to be achieved. But unfortunately such warnings were not heeded to; rather the
following factors further compounded the issue:
The outgoing Chief Justice of Pakistan abolished the sales tax on telecom
companies due to which the IRS on monthly basis faced a shortfall of Rs. 5
billion. Why the government is not intervening in the matter at the Supreme
Court level to get the issue resolved instead of terming IRS corrupt and
inefficient?
The government in order to avoid passing on the burden of increased POL prices
in the international market reduced Sales Tax on POL sector due which the
revenue streams suffered. Was the Sales Tax on POL sector reduced by IRS or
through act of Cabinet/Parliament?
The government has reduced or frozen almost all PSDP and ADP schemes in the
current financial year. Revenue collection has direct proportion with economic
activity. Without economic activity dip in revenue collection is inevitable.
Offshore assets data held by Pakistanis was shared with the IRS for retrieval of
the tax due on it. This was one of the salient features of the PTI government
manifesto. How would that amount be retrieved if the organ in IRS responsible
for taking cognizance of this data is not provided adequate human resource,
budgetary support, logistics and other paraphernalia?
The above mentioned facts the shortfall faced by the IRS and despite all
odds the revenue collected by the IRS speaks volume of their professionalism,
hard work and dedication to their job. Unfortunately, these dedicated officers
are facing criticism at the hands of generalist who fear that if the true worth
of IRS is realized by the government then their entitlement to the status
enjoyed by the PAS since the colonial era would be in danger as the Prime
Minister was heard earlier that his service in the Naya Pakistan would be the
Inland Revenue Service.
In view of the above, it is prayed that the strength of the modern economies is
determined on the basis of their economy`s health to sustain wars and not on the
basis of presentations made to the premier by the generalist baboos whose motive
is to serve the interest of their group only and not the people of Pakistan,
they are the main hindrance in devolution of power to the grass root .i.e. local
governments . The only thing the PAS(DMG) people are interested is to get early
promotions and grab lucrative posts, this can easily be judged from the fact
that during the short span of 9 months (June 2018-March 2019) they were able to
prevail and hold three high powered boards, which is unprecedented. The future
of Naya Pakistan lies in strengthening FBR run by a specialist rather and
reforms if any required, should be from the IRS itself as they understand the
ground realities in which the revenue is collected for the state of Pakistan.
Economically viable Pakistan is connected to a resourceful, independent and
honored Inland Revenue Service.
For optimizing tax revenue, the government needs to attend to the following
problems/issues on priority:
1. It has to overcome weak political economy of taxation or lack of will among
the political leaders for developing a strong, autonomous and credible tax
system. Emphasis should be on improving the poor tax culture & non- compliance
with tax laws in the public & society as well as developing role models in the
society especially among the elite classes.
2. Granting adequate financial & administrative autonomy to FBR, so that it can
attend to the current acute shortage of human resources in FBR, and provide
necessary infrastructure, logistics & financial resources for taping the full
potential of revenue collection. There is no need for further reforms at the FBR
level rather there is a need to strengthen its outreach, for taxpayer
facilitation as well as expanding the tax base. Needless to say that there
should be zero tolerance for corruption, not only in FBR but all the government
departments.
3. More important than anything else, for increasing tax revenue, the government
has to focus more on increasing & generating business activity through financial
support, infrastructure improvement, facilitation etc. At the same time it
should try to win the taxpayer trust and confidence by embarking on adequate
development & welfare interventions so that there is no justification & excuse
for tax evasion.
4. Unless the government attends to these issues on urgency basis, no new FBR/parallel
FBR, sermon or talk of reform or restructuring would do anything meaningful.