The Federal Board of Revenue (FBR), under Shabbar Zaidi, seemed to be the only economic wing of the Pakistan Tehreek-i-Insaf (PTI) government which was doing extra efforts to generate pace in revenue collection. In the first five months of the previous fiscal year, the FBR collected additional Rs 209 billion, thanks to reforms in taxation system, procedures and withdrawal of exemptions. This was achieved despite a compression of around $5 billion in import duties and slow growth. Shabbir Zaidi, however, could not prolong his stay in the treacherous power corridor of the FBR. Since his departure, the FBR has seen a consistent round of change of faces. Since assuming power back in 2018, this government has changed four FBR chairpersons, who had to leave for failing to improve performance. In a recent move, the government changed taxmen who posted to the seats just two months ago. The reshuffles are taking place on the basis of likes and dislikes, and not performance. Not to mention that the FBR needs reforms and consistent policies for a hike in tax collection. Over all, tax policies are degenerating, complex and outdated. The system cannot withstand doer officers. Thanks to cumbersome systems and corruption in the FBR, most of the people have no issue with paying indirect taxes than to become a registered tax filer. That is why only salaried people make the dominant part of tax filers, while two-thirds of the tax collection come through indirect withholding or advance tax regimes.
While our government suffers from incompetency at several layers, the tax system is the biggest reason behind the poor economy. The government lacks will and plans to make a turnaround in the FRB. On paper, the government’s plan to make the FBR the Pakistan Revenue Authority seemed vibrant but its senior officers thwarted the original plan. Every time a government of the day introduces changes to the FBR, stiff resistance from the board’s senior officers sets in. Now, when the country is facing acute slow growth because of the pandemic related measures, the FBR should have come up with an out of box solution to keep the economic activity in the swim but it never did so. It has yet to document the economy and introduce a progressive plan to generate enough tax revenues. The government needs to implement progressive tax policy and reforms in the FBR administration as reshuffle is not going to bring about any change to the tax system.
Eid in pandemic
Just like Ramazan and ensuing Eidul Fitr in previous months when people flocked to mosques and shopping malls spiking the number of coronavirus, another repeat of scenes of crowded markets is looming in the wake of Eidul Azha. Very rightly, Prime Minister Imran Khan has appealed to the nation to mark the upcoming Eid with simplicity to defeat coronavirus cases. In his recent tweet, the prime minister said: “Eidul Azha must be celebrated with simplicity so as not to repeat what happened last Eid when SOPs (standard operating procedures) were ignored & our hospitals were choked”. The million-dollar question, however, is: will the nation pay attention to the prime minister’s appeal? In cattle markets, both legal and illegal, people – both traders and buyers – are ignoring physical distancing guidelines, and it is feared that another surge in COVID-19 cases is likely across Pakistan. Besides markets, a flurry of travelling is due in days as Eids are a matter of reunion in our part of the world and soon many people will be returning to their native places from cities and other countries to celebrate the festival.
The pandemic is a global issue, and the World Health Organisation, is calling for the enforcement of lockdowns across Pakistan. The government should spring into action and enforce SOPs to keep the tide of viruses in control as in recent days, the rate of new infections is continuously going down and any slackness may trigger the infection again. There is also the fear of the second wave of the virus. Several countries, such as China and New Zealand, which claim to have defeated the pandemic and have reopened markets, are facing the prospects of the second wave of the virus. This only warns us to be vigilant as the virus is still around and its rate can only be minimised if guidelines are followed. As the festival like Eidul Azha cannot be ignored as it has religious, cultural and economic aspects altogether, the phase should be dealt with with great caution. The occasion generates billion-rupee economic activities in the trade of cattle, leather and food related items. Given the slump in economy in recent months after the spread of the virus, the government may not be able to afford a blanket lockdown, but the authorities can at least let the business on by preventing big gatherings in livestock markets. It can be done if one person from a family visits the cattle market, instead of making it a family tour to shop a goat.
Published in Daily Times, July 19, 2020