ISLAMABAD, Dec 9: The Central Board of Revenue (CBR) is likely to miss the end-December deadline for converting medium taxpayers units (MTUs) into regional tax offices (RTOs), which allows collection of income tax and sales tax under the same roof.
Pakistani tax officials had held out an assurance to the World Bank and IMF to roll out at least three RTOs, one each in Rawalpindi, Abbotabad and Peshawar by December 2006 besides, the establishment of the third large taxpayers unit (LTU) in Islamabad. The remaining nine RTOs would be in operation by end-June 2007.
Well-placed sources told Dawn on Saturday that the World Bank review team during the recent interaction with the tax officials has also raised concerns over the slow pace of the reform process, particularly in the area of information technology, which constituted more than 70 per cent of the whole reform project.
The World Bank provided $102 million assistance, $23 million grant by DFID, while remaining funds to be borne by Pakistan for the implementation of the Tax Administration Reforms Project (TARP).
Under the reform process, the sources said that the CBR was even beyond the target on the non-developmental side like appointment of consultants at market rates for various sections, purchasing of vehicles, furniture and new computers.
Besides, these consultants CBR had already appointed five revenue members from the private sector on market-based salary for the last five years. Initially, these members were appointed for a two years term to help the tax officials in devising the tax strategy. They were given another two years extension, which expired in Feb 2006, for they could not come up with their targets and goals.
Following the expiry of their contract in February 2006, another extension for indefinite period and elevation from MP-2 to MP-1 has been awarded to these members with additional perks and privileges despite their un-satisfactory performance.
Under the reform process, the sources said the CBR has recently appointed a consultant on market-based salary to help the board in devising a media strategy. Interestingly, a full-fledge member in MP-1 scale was already working for CBR for the last five years to devise media strategy besides, promoting taxpayers facilitation.
Moreover, an officer of information group in BPS-19 was also working for CBR on double salary in the same media section.
A senior tax official on condition of anonymity told Dawn that all this shows that the maximum portion of the reform process was allocated for the non-development side, the cost of which would be re-paid to the donors by the taxpayers of this country. Similar duplication also exists in other areas in terms of appointment of consultants, he added.
Meanwhile, some senior tax officials along with their families have left for the hilly resort in Bhurban despite heavy snowfall to discuss the reform strategy, the official said and added this was again the wastage of foreign grants besides, taxpayers’ money.
On the other hand, the post of Member Reforms was also remained vacant for the last five months. The additional charge was given to one of the Member hired from the private sector. This again shows the CBR’s seriousness towards implementation of the reform process, added the official.
The sources said that CBR also lagged behind in the merger of function of the sales tax with the customs following the resistance from the customs group, which was also violation of the original agreement of tax reforms signed with the World Bank.
