ISLAMABAD, July 25: The Federal Board of Revenue (FBR) has missed the June deadline for converting six medium taxpayers units (MTUs) into regional tax offices (RTOs) under the World Bank funded reforms of tax administration.

This will be the second consecutive failure of the reform team of the FBR in implementing the agreed agenda of the reforms, which is expected to be completed by the year 2009.

Informed sources told Dawn that the FBR held an assurance to the World Bank to convert three MTUs into RTOs at Rawalpindi, Peshawar and Abbottabad before December 31, 2006.

“Not only the deadline was missed but these RTOS were rolled out in the first week of January in a hurry, which rather facilitating the taxpayers created problems as there was no proper infrastructure and automation was in place, the source added.

The 4th RTO was established in Karachi. The total number of RTOs to be set up is 12, which will provide both income tax and sales tax facilities under one roof.

In response to Dawn’s story published in December last, the FBR in a clarification had claimed that all necessary arrangements had been made to set up RTOs within the agreed time.

It was then claimed that the three RTOs would become operational by March 2007 and another four by June. However, the RTOs at Multan and Quetta are likely to be little delayed and expected to be rolled out by September 2007.

The World Bank provided $102 million assistance, $23 million grant by DFID, while remaining funds were to be borne by Pakistan for the implementation of the Tax Administration Reforms Project (TARP).

A senior official in the FBR on condition of anonymity told Dawn that one of the reasons for the delay in RTOs was the improper handling of the reform wing. It was headed by a senior income tax officer in BPS-21, who was earlier replaced by a collector and then by a member from the private sector.

The reason given for delay in case of RTO at Multan was that the bid for award of contract had to be advertised four times due to non-receipt of any responsive bid. In case of RTO at Quetta, the building was set ablaze during recent agitations by some miscreants when the work was in progress. As a result the refurbishing of the building has to be done all over again.

According to the sources the delay in the establishment of these RTOs was likely to affect the setting up of remaining six RTOs. On the other hand, sources said, senior officials of the reform wing of the FBR, who were trained for the purpose, were either transferred or opted for other departments on deputation.