EDITORIAL: It was for good reason that the first directive issued by former FBR Chairman Shabbar Zaidi mandated tax officials to inform alleged defaulters before freezing their bank accounts and also getting the chairman's permission before making any such move. The result was that during Shabbar's entire stay at FBR, only once was this step enforced. And it's no surprise that not long after his departure that order has been revoked. Now you can expect litigation against the Board for blatant freezing of accounts and harassing businesses, which dropped to almost zero on this aspect since Zaidi's order, to jump right back to levels before it. This should also push Pakistan a notch or two down on the ease-of-doing-business index; something that the whole government right up to the prime minister seems obsessed with as everybody bends over backwards to stimulate business activity in the country and attract foreign investment as well.
Former Chairman Zaidi has quite rightly appealed to the prime minister, finance minister, and other relevant officials to take note of this development because it's a crying shame that FBR can so blatantly undo any measures that are meant to usher it into the 21st century. Nobody can even pretend to deny that the Board does such things because of its obsession with power. Why else would it want to go back to a practice that allowed far too many unpleasant and even illegal, actions on its part? This is bad both for business and bad for FBR because field tax officials who were forced to shape up or ship out were beginning to miss the old days when they could make up for shortfalls in collection by cooking up trumped up tax demands that had no legs to stand when litigated in courts of law and only resulted in immense suffering to taxpayers by forcibly compelling their banks into freezing of accounts and transferring required amounts to the government.
Surely, this matter ought to be taken up by the federal cabinet lest it becomes an embarrassment for a government that, according to its own spokespersons, goes out of its way to ensure transparency and accountability in all official actions and transactions. Two major reasons for the economy performing below par are; one, businesses facing unnecessary hurdles and legal complications that raise the opportunity cost of such initiatives many times over, and two, the inability of the FBR to collect enough revenues consistently. And since both these problems have their roots in the inefficiency, high-handedness and corruption it must be sorted out for the economy and the country to progress.
No enterprise - small, medium or big - can be expected to take bold decisions when it is forced to look over its shoulders for unpleasant surprises from the taxman. That such things are happening in PTI's (Pakistan Tehreek-e-Insaf's) tenure is a special disappointment because of all the promises that Imran Khan and his deputies made about just such things on the campaign trail. And in the last three years, it's appointed a number of FBR chairmen, not to mention similar juggling with other senior official positions, but nothing has worked so far. Now it's also becoming clear that state institutions' penchant for exercising power, even when it isn't exactly warranted, is also a big part of the problem and one that is not addressed simply by changing the man at the top.
In the interest of businesses and the economy, the FBR must restore the withdrawn clause immediately. These are very fragile times for the economy and the government is counting on the private sector to keep it above water. But it can't expect entrepreneurs to perform above expectations while it green-lights harassment at the same time.
Copyright Business Recorder, 2021
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