FBR failed to achieve desired results from 2016-2023: federal minister

• FBR’s collection didn't increase despite rise in tax burden: Fawad.
• Minister says public sector reforms led to cartelisation by elites. 
• Calls for undertaking much-needed civil service, tax reforms.

ISLAMABAD: Caretaker Minister for Privatisation Fawad Hasan Fawad believes that the Federal Board of Revenue (FBR) has failed to achieve the desired results from 2016 through 2023, reported The News on Tuesday.

Addressing an event in the federal capital, Fawad said analysis done by the PM Office on FBR’s data in 2016 showed that 93% of tax was collected via voluntary compliance and withholding taxes, while only 7% or Rs200 billion was collected with the help of the FBR’s staff.

The former bureaucrat said the same analysis showed that the FBR generated Rs150 billion, Rs175 billion and Rs270 billion through audits in 2013-14, 2014-15 and 2015-16 respectively. He also explained that the FBR had recovered only Rs750 million, Rs2.5 billion and Rs1.6 billion during 2013-2016.

The minister also shared that the FBR had sent notices for Rs600 billion but was only able to recover Rs4 billion in three years. From 2016 to 2023, the FBR was given sweeping powers but the result was not even close to the desired results, shared the federal minister. He said the tax burden was increased by 40% but the FBR’s collection did not go proportionally on the higher side.

He said the agriculture sector earned additional Rs650 billion in 2016 but tax contribution stood at just Rs7.5 billion.

The minister also shared that public sector reforms also saw similar results because the objective of developing a competitive private sector led to the elite earning profits by forming cartels. On the civil service reforms, he said, a file took 27 days to move from bottom to top without having additional input from the higher side.

He said the State Bank of Pakistan (SBP) was granted autonomy under the IMF programme, enabling it to share the data with the Fund.

The minister said neither the IMF nor the World Bank ever raised the issue of increasing the spread between the deposit and lending rates of the banks that led to profits of over Rs1000 billion.

Fawad called for undertaking the much-needed civil service and taxation reforms to fix the ills facing the country’s economy. 

To a query about the privileges enjoyed by the country’s powerful elites, he replied that the people would have to rein them in and a lot more depended on how they were going to elect their representatives in the upcoming elections.

Eminent economist Dr Nadia Tahir said there was a dire need for abolishing the FBR and proposed strengthening the Planning Commission for implementing the right-sizing of the government at the federal as well as provincial levels.