EDITORIAL: The Federal Board of Revenue (FBR) transferred two officials from Karachi to Islamabad ostensibly as part of a routine transfer, however, reports suggest that one of the two men launched a comprehensive crackdown against benami transactions in vehicle imports while the other had been engaged in auditing Pakistan’s Faceless Customs Audit, hailed as corruption-free by the FBR as well as relevant Cabinet members.
The former official subsequently tweeted that “when I took action against benami transactions and the misuse of baggage and gift schemes in vehicle imports, it caused trouble to the powerful lobbies. My only fault was that I enforced the law and protected the national treasury.
As a result, I was transferred from Karachi to Islamabad.” And the latter official’s audit report clearly states that “importers consistently failed to provide proof of payments substantiating that purchases of imported vehicles were made through legitimate remittances originating from foreign countries.”
The charges levelled by these two men against powerful lobbyists are very credible as elite capture remains pervasive throughout the country at three levels: (i) the tax structure itself remains heavily reliant on indirect taxes whose incidence on the poor is much greater than on the rich which has resulted in poverty levels of a high of 44.2 percent in this country; (ii) the budgeted expenditure allocation remains skewed in favour of the elite defined as those whose salaries are paid at the taxpayers’ expense and whose annual salaries/pensions have been raised every year well above the rate of inflation.
This group constitutes a mere 7 percent of the total labour force while the majority of the remaining 93 percent have not witnessed a pay raise since Covid-19, and additionally, with unemployment at a high of 22 percent there is a fear of more redundancies; and (iii) policies are routinely adjusted to favour the elite (an example being the cyclical rise in the price of sugar due to the recurring flawed decision to allow exports based on accepting the flawed sugar stock position presented by mills representatives, which critics maintain the decision-makers are fully aware of). The transfer of the two FBR officials bears the hallmark of a similar elite intent, notably to ensure that the laws are applicable on others but not on them.
While transfers and postings are a routine affair in all government departments and the FBR has claimed that the transfers are coincidental, yet the timing of the transfers does raise very serious questions. One would sincerely hope that the Chairman of FBR, Rashid Langrial, who has been publicly threatening the tax evaders and avoiders that he would make sure that due taxes are paid by all, takes cognizance of the matter and initiates an impartial inquiry in this matter.
In the event that the transfers were not routine, Langrial must reverse the decision. However, if the transfers were routine one would hope that he takes the decision to allow these two men to continue in Karachi that would not only send a message to the vehicle importers who fail to provide proof of payment that they can no longer use their influence to bypass their dues but also to the FBR officials that their senior management as well as the Cabinet itself stand behind them when they take on the elite.
To conclude, there is a need for all government departments to establish a system, a procedure, which would allow officials to identify those pressuring them to circumvent the law so that in the event of their transfer they have the necessary paperwork to prove that they did pre-warn their senior management.
Copyright Business Recorder, 2025
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