THE delay in restructuring the Central Board of Revenue (CBR) has forced its authorities to revise downward the revenue collection targets and this has not gone well with the World Bank and the IMF.

The ministry of finance has allowed the CBR the downward revision of the revenue collection target for 2001-2002 from Rs 457.7 billion to Rs430 billion on the ground that exports have registered a decline over 30 per cent in imports in September, October this year.

The World Bank and the IMF have discussed the matter with the senior officials of the ministry of finance and asked them to stop downward revision of the targets. They emphasised the need to complete, as soon as possible, the restructuring of the CBR so that revenues could be increased and leakages plugged.

Perhaps it was in that context that Finance Minister Shaukat Aziz last week that revenue targets would not be reduced further and that Rs430 billion target was final and would be achieved. But Chairman CBR Raiz Malik said that revenue target could be further slashed if the current situation persisted. Malik was referring to the continuing decline in imports and the slowdown in business activity due to September 11 events.

The ministry of finance has directed the CBR to pay refunds of Rs12 billion to the exporters to the tune by the end of the current month. It is not clear whether the target of Rs 430 billion is inclusive of refund or without it. The finance minister and the BR are expediently silent on the issue.

The decline in revenue is generally linked to the delay in the restructuring of the CBR to be carried out in the light of the IMF recommendations and the report of the Shahid Hussain committee on tax administration. President General Pervez Musharraf was given a presentation on May 24 this year by the Shahid Committee and the government had sought time till June 30 to start implementing the report. And according to the programme, the CBR would start taking various steps from January 2002.However, there is no indication that any schedule has been drawn.

It is said that the CBR officials are shy to call the members of the Shahid committee to discuss various issues, with the result that there is delay and there is no sign of implementation of the report. In principle, a direction to undertake the reform programme should have been given along with the timeframe to overhaul the whole organisation. No decision has been taken by the CBR as to what changes it contemplates in the customs and sales tax regime. “This job requires a fundamental re-designing of the business processes on which so far no attention has been given”, concedes an important official of the CBR.

There is no plan in place to improve the capacity building except that people hear every now and then that information management is being improved to reduce contact between the taxpayers and the tax collectors and in this behalf the term “faceless” is often used by senior officials of the ministry of finance and the CBR. “Information management system can not be created in the air”, another official said, admitting that the job which was to be done in two years on the recommendations of the IMF and Shahid Hussain report would now take five years to have every thing in place.

Interestingly, the CBR is currently busy in organising workshops and seminars to start the reform process under the restructuring programme. But many people within the organisation are asking that what is the need for such workshops and seminars when this job had already been done by the members of the Shahid Hussain committee by meeting collectively and individually all the important official and non-official experts in Karachi, Lahore, Islamabad, Fisalabad and some other cities.

Why the CBR is still discussing as to what should be the direction of reforms; why there is no decision on offering big salaries to those who are to be inducted in the CBR. Why there is no word about the business processes to be improved as were given to understand to the President. Where is that independent recruitment board which was to be set up? All this preparatory work should have been completed by December this year but it will now take time to do that job and in the process there can not be any restructuring in thr near future which is one of the most important tasks of the ministry of finance and the CBR.

The ministry officials and the CBR are only talking about the policy board, mission statement and the new members to be appointed from such and such date. It is also being said that large taxpayer centre will be established in Karachi and that the Supervisory Board will be set up by May 31, 2002. “It is a nice wish list”, commented an official. He said that concerned authorities are taking unnecessary time to re-organise the CBR. Some say that it is the vested interest which does not allow to carry out any restructuring.

Insiders say that the Shahid Hussain has left for Washington deeply disappointed and other members of his committee are equally disillusioned because the implementation of their recommendations are being resisted in one shape or another, Concerned people do agreed with the report but when it comes to implementing it, various excuses are given to delay the process. But the question is whether the World Bank and the IMF will take the issue lightly.