Pakistan Revenue Automation Ltd (PRAL), instead of contributing towards transparency and enhancement of tax revenue, has opened new avenues for tax evasion and false claims in the Federal Board of Revenue (FBR), according to stakeholders here.
Although PRAL runs on public money, yet conveniently it is not a government entity, as its assets, liabilities, spending, contracting, inventories remain beyond the jurisdiction of mandatory annual audits that apply to government organisations.
Stakeholders say that it has inflicted losses to the public exchequer in the last three decades, and has proved a failure. The process by which public exchequer has owned this private limited company is not clear. Unlike other private companies operating in the country, PRAL looks for business or be efficient or productive to be profitable.
It is said that the company bypasses government processes; salaries and privileges could be granted outside the official government umbrella, and procurements and contracts could be entered into without following government procedure and public oversight.
Interestingly, since its inception, not a single audit of any of the areas of PRAL has ever been conducted, or made public, and any suggestion of such audit is strongly resisted by the FBR. PRAL was developed for improving sales tax collection, but it is far from being perfect, and has, on the contrary, inflicted huge losses on the country since 1994.
According to stakeholders, it enjoys a strange dual status. It gets all FBR contracts, without having to go through open competition or the mandatory tendering process of the government, on the plea that it is a government organisation. Yet it subsequently escapes all government obligations and controls on the plea that it is a private company. If FBR ever tenders work, PRAL does not bid but chooses to represent FBR as a regulatory authority on behalf of the government. When all is successfully completed by the company, PRAL, as regulator, rejects the work. The company is fired and the same project is allocated internally to PRAL. As such it gets contracts without competing.
The project that it finally delivers to FBR is always 'successful', since first PRAL in its private capacity delivers a project and then in its regulatory capacity declares its own project as successful.
The stakeholders raise questions in different forums that how over the past 15 years PRAL got contracts worth millions of dollars of the government and other donor agencies like the World Bank and Asian Development Bank without going through transparency, open competition or tendering process which is mandatory for spending any amount of the federal government that is above Rs 50,000.
They also demand to show millions of dollars of hardware acquired by PRAL over the years for improving tax collection. Also, PRAL's 'successful' projects should be made public because it is in national interest. It has never been audited, either in hardware or software, since 1994. The software designed to boost productivity and to enhance tax collection is also questionable with the result that the country's tax system is still limping. Stakeholders demand that public exchequer should introduce another foolproof system with proper securities in consultation with them to maximise tax revenue.
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