a conference titled 'Accountants for Business' speakers noted a well-known and highly disturbing fact: rampant corruption in the tax department has led to a decline in the tax to Gross Domestic Product ratio - a ratio long-considered to be a reflection of not only corruption, but also the lack of commitment by the country's legislators, as well as the executive to tax the income of the rich.
Concerns about the appallingly low number of income tax payers have been voiced repeatedly at such conferences as well as by donors, including the International Monetary Fund, and yet it is largely the salaried people who constitute the bulk of the contributors to income tax collections in Pakistan. Thus, there is general public support for the need to raise taxes and raise them in a manner that is considered fair and equitable by the populace.
Many in Pakistan, so used to high levels of corruption, are simply not aware of the fact that corruption itself imposes a tax on the common man. A study undertaken in March 2009 by the head of the political science department at the University of Illinois in Chicago referred to a "corruption tax", which he defined as the extra money Illinois residents pay because of dishonest public officials.
He further clarified that this tax is payable by the general public when 'politicians give government jobs to unqualified cronies and contracts to expense-padding donors. They pay when public employees take bribes to overlook violations, when law enforcement spends millions prosecuting crooked politicians and when people are injured because of government misconduct'.
This definition must bring to mind numerous ongoing hearings of cases in Pakistan that are currently sub judice. Speakers at the conference revealed that a little less than 50 percent of all corruption in Pakistan emanates from abusing the rules and regulations in public procurement of goods and services.
The Public Procurement Regulatory Authority (PPRA) is an autonomous body endowed, according to its website, "with the responsibility of prescribing regulations and procedures for public procurements...and has the responsibility of monitoring procurement by public sector agencies/organisations and has been delegated necessary powers under the Public Procurement Regulatory Authority Ordinance 2002."
The allegation is that corruption can be mainly sourced to violation of PPRA rules by ministries and state-owned enterprises. It is, therefore, critical for the government to strengthen PPRA's oversight capacity and to endow it with enforcement capacity. This would require a major overhaul of the existing board of the PPRA, which includes the sitting finance secretary as the chair and five sitting secretaries from six ministries as members.
There are only three private members who are also nominated by the federal government. PPRA's charter allows for a decision to be made on the basis of a majority vote which allows the bureaucracy to overrule any legitimate procurement concern. The PPRA charter also allows for exemptions, a fuel for the corrupt.
To ease these concerns, it is proposed that the PPRA be ring fenced with financial and administrative autonomy and its board of directors be appointed from outside the government, with the approval of a Parliamentary bipartisan committee.
The Managing Director and other senior department heads, are appointed and made answerable to the Board of Directors only. PPRA must also have its investigation and prosecution branches while rejecting any interference from the executive, judicial or parliamentary pillars, as persons in all the three are involved in spending taxpayers' money.