Chaos in FBR as govt aims for budget on May 22

Updated May 08, 2019

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Meanwhile, the summary to appoint Shabbar Zaidi, a Karachi-based chartered accountant, as new chairman of the FBR was returned by the cabinet since it contained powerful reservations about the appointment. — File/ Photo:Screengrab/Youtube
Meanwhile, the summary to appoint Shabbar Zaidi, a Karachi-based chartered accountant, as new chairman of the FBR was returned by the cabinet since it contained powerful reservations about the appointment. — File/ Photo:Screengrab/Youtube

ISLAMABAD: The government is aiming to announce the federal budget on May 22, according to a communication received at the tax bureaucracy last week, as confusion reigns over the status of the current and incoming chiefs of the Federal Board of Revenue (FBR).

Meanwhile, the summary to appoint Shabbar Zaidi, a Karachi-based chartered accountant, as new chairman of the FBR was returned by the cabinet since it contained powerful reservations about the appointment.

Jehanzeb Khan had been conducting in-house meetings to coordinate the drawing up of a revenue plan and projections that are necessary preparatory work for any budget exercise when he learnt from television reports on Friday night that a decision had been made to end his tenure as FBR chairman. Since a transfer order to that effect had not been received by him, sources at the FBR told Dawn, he continued with his assignment, discharging his responsibilities on Saturday as well.

“Budget-related meetings were held at the FBR even after the announcement of the termination of his services hit the airwaves,” an informed source told Dawn, until Prime Minister Imran Khan made public the name of the replacement. “After that the incumbent chairman could not continue with his work” and budget preparations at the FBR ground to a halt.

Cabinet fails to approve name of new FBR chairman as work grinds to a halt

A meeting of the federal cabinet was to approve the name of Shabbar Zaidi, the third private sector individual to head the FBR, as replacement for Jehanzeb Khan, but several sources present at the meeting told Dawn that the summary seeking the approval had to be withdrawn.

According to them, the prime minister was cautioned against pushing the nomination through since a judgement of the Islamabad High Court holds the field in the matter of private sector appointments to such posts. It lays down strict criteria that must be followed before making such an appointment.

The summary was sent by the Establishment Division but, according to those who saw it, the summary contained important reservations.

The Establishment Division secretary is reported to have raised two major objections to the appointment — a conflict of interest in appointing a private sector chartered accountant whose job all along has been to advise large business houses on tax matters, and the failure to have followed the guidelines laid down by the Islamabad High Court in the nomination of private sector individuals to such positions.

In the case of the latter, the summary is reported to have said that a notification issued by the Establishment Division would be open to contempt of court charges since the criteria laid down for such appointments have not been followed. Those criteria include, for example, public advertisements for the post and interviews with interested candidates.

These were spelled out in the Arshad Ali Hakeem case from 2013, in which the Islamabad High Court actually struck down the appointment of the last private sector FBR chairman for not having been made in accordance with the law.

Such steps have not been followed in the case of Shabbar Zaidi’s appointment either, and at least a staff association within the FBR has threatened legal action against the appointment should an official notification be issued.

According to a source present at the cabinet meeting, the prime minister “expressed his displeasure” and ordered that the issue be resolved “in 48 hours”.

Meanwhile, budget-related work at the FBR has ground to a halt, and an impasse is now looming before the government.

Complying with the procedure laid down by the apex court in its judgement could take months, but the government needs an active FBR chairman immediately to proceed with budget preparations. On top of that, the beginning of Ramazan sees slackness in the pace of work and Eid holidays will also complicate the calendar, given the tight timelines.

On Tuesday, an FBR official told Dawn, Jehanzeb Khan spent the day in his office since he is still the chairman legally until his notification for transfer is issued by the Establishment Division. But he did not attend to any important matter.

Published in Dawn, May 8th, 2019