EDITORIAL: Sometimes it becomes difficult to tell whether FBR (Federal Board of Revenue) suffers more from corruption or incompetence within its ranks or from a mixture of both.
The dressing down it received, first, from the FTO (Federal Tax Ombudsman) and then the president for divulging the identity of a whistleblower, that too to the firm whose corruption and tax evasion he exposed, is a classic case in point.
It’s difficult to understand why the president still gave the Board 60 days to file a full report, even though the company in question has been threatening the whistleblower with very serious consequences. But the fact that it did not utilise the complete information provided by him to claim taxes unpaid to the state, and has been actively lobbying to make the case go away, tells a lot about the national tax collector.
It turns out that the complainant informed FBR that a certain company, where he was employed, was involved in various financial irregularities by maintaining bank accounts in the name of its employees, concealing warehouses with undeclared stock, less tax payment, and under-invoicing at import stage; thus causing huge losses to the national exchequer.
But when FBR moved only very reluctantly on the matter, and recovered an amount far short of what had been evaded, the complainant decided to approach the FTO.
FBR then raised objections over FTO’s jurisdiction, but its stance was rejected with the latter holding that the complainant should be given another opportunity to present his views before the former, yet it did not comply with the order and instead filed a representation with the president.
But the president also backed the FTO’s position, which raises a few very important questions. Why, for example, did FBR give the impression that it was bending over backwards to make sure that the charges made by the whistleblower didn’t stick, as if it was watching out for the company accused of acute tax fraud?
Why has it still been given two months just to give its side of the story in writing when this matter, in which there is insider information of alleged theft and fraud, should have been settled as soon as possible? And how will FBR, or even the government for that matter, make up for the loss of credibility, not to mention the risk to the complainant’s life, because the whistleblower’s identity was deliberately leaked to the party he was exposing?
Does anybody seriously expect more people to expose criminal tax evasion, and other illegal activity, on part of their employers after this episode? How will FBR be penalised for this.
And, above all, is anybody doing anything at all about creating a credible witness protection programme in the country?
The very essence of such exercises is to keep the identity of the person spilling the beans and providing confidential information secret, to encourage more instances of people exposing corruption so the state can take effective action.
Here, even though some information was forthcoming despite the absence of such a programme, FBR could not only not maintain necessary secrecy but went ahead and informed the company in question about the identity and actions of the person that exposed it to the authorities.
Surely, this can’t be a case of simple incompetence because nobody needs to be educated about the importance of secrecy in such things, especially not a body that shuffles trillions of rupees in taxes every year.
Authorities must therefore immediately begin investigations into whether FBR was complicit in this tax evasion; given the way it went after the complainant as if its own interests were being hurt. And the government must also finally give a serious thought to the need for creating an effective witness protection programme.
Copyright Business Recorder, 2023
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