Haroon Akhtar Khan, former special assistant to prime minister on revenue has said that some people in the current setup like to see him appointed as chairman of the Federal Board of Revenue (FBR) instead of SAPM, which was not acceptable to him. This, he stated while speaking at Aaj TV programme "Paisa Bolta Hai" with Anjum Ibrahim.
Khan also said that owing to changed external conditions on account of coronavirus and the decline in oil prices, the government can re-negotiate the International Monetary Fund (IMF) programme and cut down the interest rate by 200 basis points.
He said that Prime Minister Imran Khan had invited him to give unbiased view on economy, especially related to businesses and ground realities. "I went as a patriotic Pakistani citizen,...while seeing that the PM has a vision to turn around the country and the economy," said Khan, adding that, he went for presentation and discussion, and not seeking a job at all.
However, Akhtar said, the prime minister offered him a position at the meeting, but he was not prepared to say yes or no at that time. Akhtar further said that the prime minister was informed that if he wanted take work from him, reporting line needs to be clear because.
"I do not want to go around with files in hands and not achieve the target, given to me," Akhtar said, adding that he informed the prime minister that his job should be result-oriented and reforms focused. "Later, I got some information that the current set up would rather like to have me as chairman FBR. I had told the prime minister that there is no way he could accept the slot of chairman FBR," Akhtar said, adding that it was his old view that the FBR chairman should be from the FBR and on top of that there should be a full-time dedicated minister on revenue as finance minister do not have due time required for FBR.
"So I cannot back away from my position," he added. Replying to a question, Akhtar said that the SAPM was at a higher level than chairman FBR, the later is being appointed through FBR Act 2007. But in this act, it has been stated that the federal government will appoint chairman FBR on terms and conditions that may be determined by the federal government and there is no such explanations that what the terms would be.
The SAPM with the status of minister attends all cabinet meetings; however chairman FBR can attend meetings only on invitation and on a specific subject relating to him. He can direct elaborate what are the reasons behind the shortfall in revenue it is critical to be SAPM rather than chairman FBR, he added.
There should be a minister who could shield the chairman FBR from political pressure and all sort of pressure from the Public Accounts Committee and other parliamentary committees that he may fully focus on revenue collection, Akhtar added.
Talking about agreed high revenue target with the IMF, he said that he had a lot of respect for the SBP governor and the adviser on finance but when people do know about the ground realities then they accept such conditions.
Two serious conditions on economy were accepted, one was high discount rate, and second was the FBR revenue target of Rs 5.5 trillion, said Akhtar, adding that these two were blunders. The government informed the IMF that they have tax growth of 15 percent of GDP, while 20 percent was additional tax imposed on the IMF demand, and was informed of 43 percent growth in revenue.
But, how much such measures would impact economy, said Akhtar, adding that despite all these, how can one think about getting five percent GDP growth. He further said Shabbar Zaidi was the top tax consultant in Pakistan, and that does not necessarily means, he would be the best tax collector, and that is the one reason he could not perform the way he was expected to. He said that reforms go hand-in-hand with revenue collection, and reform stream should be totally separate.
The FBR's status by definition is of revenue/tax collector and always resists reforms.
"When I was thinking to accept this position, I was thinking to run reforms, a totally separate stream reporting directly to [the] revenue minister and was targeting to do a small reform every month, and every quarter a major reform," said Akhtar, adding that it was not reform to appoint two deputy chairmen, and remove the chief commissioner, as nothing was going to change that way.
He said that Hammad Azhar's case was totally different. Azhar was an elected parliamentarian brought to the cabinet and was appointed the federal minister for revenue, whereas Hafeez Sheikh would have been totally out of revenue.
In case of the SAPM, Sheikh would still be the minister in-charge of revenue but SAPM was specially created to head the revenue division as far as the FBR is concerned, reporting directly to the prime minister but the file can go through the normal way to the minister in-charge.
The appointment of the SAPM will not undermine Sheikh' position, he added. "I have given a viable way and let's wait and see what happens," he added. He further said that withdrawal of zero-rating status from the exports sectors was the biggest mistake and was a deadly stroke as it pushed the exporters hard.
The rewards of zero rating in exports are far reaching, than meager benefits in terms of tax collection on domestic sale. For getting revenue target, refunds are always stopped, he added. The unique situation emerged from the coronavirus, which resulted decrease in oil prices.
Taking benefit of the situation now when inflationary rate would go down interest rate needs to be cut by 200 basis points, he added. How the developed economy has reacted to the coronavirus like in case of America and England where interest rate was cut by half percent.
We must send the signal to the market, we mean business, where the interest rate to come down to pick the economy, otherwise it would totally collapse, Akhtar added. He further said that the Egyptian model was not going to work in Pakistan.
What happened to the hot money around $700 million will be out, and that is why rupee is going down. Due to changed external conditions, the IMF programme needs to be re-negotiated due to decline in oil prices and coronavirus, he added.
Comments
Comments are closed.