Tax experts and practitioners have criticised the Federal Board of Revenue (FBR) for adding more and more workforce in the name of reforms without linking it to their performance towards revenue collection. FBR chairman Dr Muhammad Irshad while inaugurating the district taxation office (DTO) in Charsadda said that the DTO offices established under the newly introduced reforms would be autonomous, having financial and administrative powers to recruit staff.
The experts are of the view that FBR has devised not a single Key Performance Indicator (KPI) for the workforce. Instead, its total focus is on collection of withholding tax than relying on its staff to improve revenue generation. "Receiving of advance taxes, imposition of withholding taxes and blocking the sales tax refunds are a few tricks the FBR has played to show a growth in revenue under the 2013-16 Extended Fund Facility (EFF) programme from the IMF," they added.
Sources from the banking industry have also lamented over the imposition of withholding tax on cash withdrawal, saying that the consumers prefer to deal in cash than approaching banks. Asad Feroze, a tax practitioner, said the perks and privileges of the FBR staff were on the rise and no one was paying heed to the fiscal consolidation.
Renowned economist Dr Hafeez Pasha opined that the FBR's credit for revenue growth is merely a management trick as a country with 4 to 5 percent GDP growth cannot yield more than 20 percent revenue growth. The tax practitioners have also criticised the FBR for trapping more and more taxpayers into the net of audit of income tax returns, saying that a total of 8000 cases are pending with the regional income tax office in the city. They said it was out of the capacity of the FBR audit staff to handle such a huge number of audit cases and blamed the field officers for forcing the taxpayers for an underhand deal to avoid audit of their returns.
"I have told the Chairman FBR that the number of taxpayers would reduce in case the field inspectors are not stopped from arm twisting of taxpayers in the name of audit," said Naeem Shah, another tax practitioner. He said no revocation of blacklisting of a taxpayer takes place until he submits the penalty. The tax experts said the reforms process should not focus on recruiting unnecessary staff. Instead, the FBR should activate the existing staff to get maximum results on revenue growth, they suggested.