Making a mountain of a molehill

In what has become a tradition in Pakistan an investigative authority begins to make tall claims of identifying and proactively proceeding against those who are breaking the law, and later backing out by maintaining that the ground reality was markedly different and no law was broken. The recently appointed chairman of Federal Board of Revenue (FBR), Tariq Pasha, acknowledged to the Standing Committee on Finance and Revenue that his staff had prematurely claimed that 2785 very rich Pakistanis had laundered 102 billion rupees was not true as they had declared the amount as gift which is not taxable as per the law. Pasha added that this was similar to the claim made by FBR in 2016 that it had unearthed 256 cases of specious transactions but in actuality, there were only 3 such cases. The objective behind this practice: to show a good performance to the media, Pasha added.
Much criticism has been hurled against FBR staff for decades ranging from accusations of abuse of their discretionary powers to massive corruption with former Finance Minister Shaukat Tarin claiming that FBR's corruption accounts for an annual loss of around 500 billion rupees to the treasury. However, even with this kind of pressure such overstatements with respect to performance cannot be justified.
It is a matter of record that the outcomes of the World Bank-funded Tax Administration Reform Programme, at a cost of 149 million dollars, were, as per the bank's website "moderately unsatisfactory; risk to development outcome was high; bank performance was moderately unsatisfactory and borrower performance was unsatisfactory". TARP's objectives remain largely unmet to this day and included: (i) Management and institutional development, to support and enhance the broader tax reform strategy by driving strategic changes within FBR's organisational structure; transformation of the organisation's culture and ethos; and, the development of sound people-management policies and procedures; (ii) human resources development, includes developing an overall Human Resource Management strategy, towards developing a workforce rationalization strategy, and implementation plan to reflect the rollout of a new functional organisation; and (iii) improving revenue operations to support extensive strategies and initiatives to transform the administrations of the FBR's three revenue streams: Direct Tax, Sales Tax, and Central Excise and Customs.
It is unfortunate that in spite of donor assistance and in spite of considerable financial assistance FBR reforms remain as critical as they were in 2004 when TARP began or when it ended in 2011. And in spite of some FBR chairmen who were committed to reforming tax administration the Board has somehow resisted all attempts in this regard. One can only hope that a more sustained effort is made to bring about the reforms that all are agreed are required but somehow are never implemented.