ISLAMABAD, Dec 30: The Central Board of Revenue (CBR) has missed the end-December deadline for converting three medium taxpayers units (MTUs) into regional tax offices (RTOs) under the World Bank funded reforms of tax administration.

The board had agreed with the donor agencies of the Tax Administration Reform Project (TARP) to establish at least three RTOs - an office to collect income tax and sales tax under the same roof - in Rawalpindi, Abbotabad and Peshawar by Dec 31, 2006.

A source in the CBR told Dawn on Saturday that in a recently held meeting the CBR chairman was informed that even the basic infrastructure was not ready for the operationalisation of these RTOs.

In a response to Dawn’s story published in the second week of the current month, CBR in a clarification had claimed that all necessary arrangements had been made to make these RTOs operational before December 31, 2006.

With regard to the commissioning of remaining nine RTOs, three will become operational by March next and another four by June next year. However, the RTOs at Multan and Quetta were likely to be little delayed and expected to be made functional by September 2007 instead of June.

Interestingly, the appointed director general of RTO Peshawar Mrs Abida Ali in a statement, issued on Dec 27 through regional information office Peshawar, announced that RTOs at Peshawar and Abbottabad would be functioning from January 1, 2007, which has already been declared public holiday for Eidul Azha.

The source said that the CBR remained silent about the issuance of the statement by a director general who was not authorised to speak about the reforms process. “It is not an ordinary issue of the establishment of an office but a major change in the taxation history of the country. The director general cannot announce the establishment of such big office through a statement,” the source added.

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).

According to the source, with the delay in the establishment of these RTOs it was likely that the setting up of remaining nine RTOs will also be further delayed.

A senior official in the CBR 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 replaced by a collector of customs in BPS-20.

After more than a year posting, the collector was then recommended for Staff College six months course necessary for promotion to next grade.

The reform wing then becomes an additional responsibility of the privately hired member for tax facilitation and education. “How you can expect from a private sector member to press the government employees for completing the assignments within the time period,” added the official.

On the other hand, the official said, senior officials of the tax department were either transferred to tribunals or some opted to join other departments on deputation.