The federal government on Thursday officially confirmed the appointment of Shabbar Zaidi as the new chairman of the Federal Board of Revenue (FBR) on an "honorary and pro bono basis for a period of two years with immediate effect".
The appointment, first announced by Prime Minister Imran Khan on Monday, was today notified by the Establishment Division. The notification, however, did not say if Zaidi will also be given the additional charge of secretary revenue — a portfolio traditionally and jointly held by the FBR chairman.
A summary accompanying the notification noted that Dr Ahmad Mujtaba Memon's named was initially discussed by the selection committee for the FBR chairmanship but he was eventually deemed "too junior" by the committee.
Subsequently, upon the recommendation of prime minister's adviser on finance, Dr Abdul Hafeez Shaikh, Zaidi was considered for the position.
The summary, which details the minutes of a May 6 meeting, noted that the selection committee was also mindful of the Islamabad High Court's 2013 decision to set aside Ali Arshad Hakeem's appointment and orders that an FBR chairman from the private sector must go "through competitive process after advertising the post".
Hakeem was also brought from the private sector to head the FBR for what proved to be a short-lived stint of one year till his appointment was struck down as illegal by the IHC on a petition filed by an Inland Revenue Service officer.
While Hakeem enjoyed all financial benefits of the post, the summary added, the possibility of Zaidi's appointment on an honorary and pro bono basis could be explored to avoid risking contempt of court.
The Law and Justice Division's advice was sought on the issue as well as the possible existence of a conflict of interest since Zaidi, as a Karachi-based partner in chartered accounting firm A.F. Ferguson, has made representations before the FBR on behalf of his clients, the summary added.
Prime Minister Imran's announcement on Monday had not gone down well at the FBR where the Inland Revenue Officers Association issued a harsh statement almost immediately following the announcement in which they threatened court action against it.
“The association believes that the issue of appointing any person from private sector has already been resolved through the judgement of Islamabad High Court,” said the statement, referring to the case of Arshad Ali Hakeem, threatening to bring a similar case against Zaidi’s appointment.
“The then government did not challenge the high court order which has already issued details for appointment from the private sector,” the statement had said, adding that “after issuance of the notification, the association will file a contempt of court petition” this time.
“It is their right to file this case,” Zaidi had said when approached for comment on the matter by Dawn. He laid out his priorities, saying he considers “building trust between the state and the taxpayer” as the topmost challenge. “This is done through automation, minimising contact between tax man and taxpayer, and by promoting a voluntary compliance” — acts that he said will automatically lead to base broadening.
As a senior chartered accountant, with long experience dealing with some of the largest businesses enterprises in the country for decades, Zaidi brings with him a wealth of experience and knowledge about the tricks of the trade that are commonly used for tax evasion.