EDITORIAL: Is it really a surprise that FBR’s “first-ever electronic tax audit of immovable property” has unearthed fraud and withholding tax evasion to the tune of billions of rupees, which were collected on property transactions but never reached the exchequer?
It turns out that the Regional Tax Office (RTO) in Sargodha, the first-ever to use the electronic audit facility, has busted a gang of property registrars, revenue officers and lawyers in Punjab who simply pocketed withholding tax on buying and selling of immovable property.
The evaded sum is so large that if other departments can take a leaf out of RTO Sargodha’s book, FBR can “easily surpass its revenue collection targets for the remaining months of 2023-24”.
Such large-scale organised corruption is never possible without active collusion of officers inside the government machinery, of course, so the FBR itself must also be investigated to see just how deep this rot runs. And when punishments are being handed out, strictly in accordance with law, the authorities concerned must make an example out of those that have facilitated this fraud.
Hopefully, relevant authorities will need no further proof of not just the usefulness of electronic audit, but the desperate need for it. For, if it hadn’t been for this smart idea, there’s little chance that this racket would have been exposed and the tax money finally routed to the FBR.
Nobody anywhere from the finance ministry to the top-most offices of the government needs any reminding of the urgent need to increase tax revenue; both to beef up reserves and to keep IMF’s bailout money flowing.
The FBR is already battling its own mix of inefficiency, incompetence and corruption that is the largest hurdle in the way of expanding the tax net and increasing tax earnings. However, in this instance it is the provincial civil servants that have deprived the FBR of its revenue.
Theft and misappropriation have become hallmarks of almost all government departments. That’s all the more reason to incorporate new technologies, just like the electronic audit, into the mainframe.
Such initiatives have become necessary to shake the entire deadweight bureaucracy out of its slumber as well. Yet now that it has delivered one small result that has captured the attention of the government, one can be sure of the usual pushback from the service.
And that, in turn, will put the government itself to test. Usually all talk of bureaucratic reform, just like FBR reform, judicial reform, etc., comes to a grinding halt when time comes to put words into action; precisely because of fierce resistance to change from within.
Yet, at the end of the day, it is for the government to drive all change promised to the people. The caretaker setup might not have much leverage, but surely it can set the process of the most urgently needed reforms in motion before it bows out in less than two months.
Copyright Business Recorder, 2023
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