Cricketing icons have often smeared their otherwise flawless careers by inviting allegations of chasing records instead of playing for victory. Now it seems the Federal Board of Revenue has taken the wrong leaf from the same playbook.
After all what other explanation can be drawn from the fiasco surrounding the governments revenue target for the outgoing fiscal?
On June 30th, FBR chairman Salman Siddique, flanked by the Finance Secretary Waqar Masood proudly announced at a hastily convened press conference that the target of Rs1588 billion had not only been achieved; but surpassed by a couple of billion crisp ones.
However, the fantasy faded quickly as news reports quoting FBR officials contested this claim; instead asserting that the tax man had fallen short by about Rs38 billion.
Speculation over the veracity of these reports was snubbed when FBR chairman Salman Siddique finally admitted to a rather triumphant band of reporters that the revenue target had in fact been missed.
FBR officials claim that the discrepancy is a product of a "misunderstanding within the FBR". The official version, should you choose to believe it; is that within the FBR gross collection numbers were being quoted which were somehow relayed to the chairman as the net collection tally.
Folly or fudging; the cat had to get out of the bag eventually since the State Bank of Pakistan has a more accurate picture of net revenue collections as refund cheques issued by FBR are cashed through them.
Informed sources reveal that the discrepancy is more technical than human error. Real-time gross settlement (RTGS) system used by the central bank to keep track of government revenues has a pre-set deadline of July 2, for recording online transactions, while offline figures must be recorded by July 7. Bank financing provides the picture on the fiscal deficit to the central bank.
It is learnt that in September 2010, at the Commissioners conference the former FBR chairman Sohail Ahmed ordered that gross collection targets should be given to the tax hounds henceforth, so that they do not hold back refund claims of tax payers.
Regions/ circles started giving gross figures to the Chairman but refund chequs were simultaneously being given from a centralised system in FBR. It looks like the bosses at FBR relied on the gross tally and ignored adjusting this with the refund checks being issued on a daily basis.
Sounds strange, does it not?
Of course no story is complete without a lesson. So the point to take home from this ignominy is that chasing targets, especially those that have been revised downwards on multiple occasions; serves little purpose.
Despite the announcement of a mini-budget in March 2010 and a hike of one percent in the sales tax rate, actual collection relative to GDP, by the tax authorities falls short of last years revenue collection relative to GDP, by four percent.
Instead, of holding a midnight press conference on June 30th and blowing the trumpet loudly FBR should have waited until July 10th to give an accurate tally of tax collection. Last year, the revenue collection was Rs1327 billion against a target of Rs1380 billion so it is not the first time that FBR has fallen short of its mandated target.
However it is the first time that it has mud pie on its face. Somebody should be held accountable for this embarrassment.