World Bank for reduction in FBR workforce

The World Bank has proposed to the Federal Board of Revenue to rationalise the number of staff and employees to improve efficiency of the tax administration under reforms. Sources told Business Recorder here on Friday that the WB mission has submitted a report to the FBR on the 'lessons learned from the Tax Administration Reform Project of the FBR'.
According to the report, major increase in tax administration effectiveness requires steady fundamental organisational change. The Tarp anticipated a gradual evolution of the FBR from a tax-based to a function-based organisation. Efficiency increases were to come from rationalisation of the number of staff and reallocation of staff to activities that were to be computer assisted.
The degree of resistance to change within the organisation and especially to changes in traditional activities (ie Customs officers worked on Sales Tax and Excise Taxes only with Income Tax officer working exclusively on direct taxes) was not anticipated in the project design. The introduction of a change to physically locate customs staff working on sales tax close to staff working on Income Tax without changing any reporting structures was supposed to ease the transition of the organisation (this was known as co-location of staff) - this didn't happen; rather, it appears to have set the organisation up for increased entrenchment to maintain the traditional modus operandi.
The report further said that a fundamental change in the way business is conducted within the organisation, especially when it affects field workers and the way they do their job has the potential to be extremely disruptive. A plan that ensures all the staff are at least well informed and understand what changes are being made and addresses the concerns of rank and seniority must be in place in the early stages of the program. Ongoing monitoring to ensure buy-in or to find a way to address perceived or actual inequalities in the transition needs to be actively undertaken. Corrective actions need senior management participation and a contingency plan should be in place if resistance to the change is indicated.
It further said that the FBR should link performance to compensations and merit to promotions: In the TARP plan, it was recognised that the staff compensation levels were substantially below that of the private sector. The modernisation of FBR that was being envisioned through TARP would require more "knowledge workers" to make much more use of computerised systems. There was also an implicit recognition that when staff compensation was significantly below market values, there was an increased risk that staff would look for other means to augment their income.
Special funding was found to offer additional compensation to FBR staff, but this funding was applied across the board. The additional compensation was offered irrespective of the staff's performance and their acquisition of new skills. This sent a misleading message to the staff, although the majority of the increased compensation was offered to the officer cadre.
In addition, this reinforced the old message that rewards (compensation and promotions) were not merit and performance based, but rather were an entitlement. Rather, the intended message was that if you adopt the new modernised way of doing work you will be rewarded, the WB report added.