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FBR chief’s health issues set rumour mill churning

Written by The Frontier Post

F.P. Report

ISLAMABAD: Federal Board of Revenue (FBR) Chairman Syed Shabbar Zaidi has again proceeded on leave on medical grounds, giving rise to speculations that he may not return this time due to weak health and worsening performance of the tax machinery.

The chairman has gone on leave at a time when the FBR is giving final shape to a mini-budget that it is planning to introduce on the instructions of the International Monetary Fund.

“I am on leave. Doctors will decide the duration,” Zaidi told the meda when he was iasked whether he has decided to step down due to health reasons.

Zaidi had joined the office ten days ago after availing two-week medical leave. But since January 20, he was not actively looking after his work and delegated many routine functions to the member, Inland Revenue Policy and the member, Administration.

He had already asked his senior officers to attend the upcoming IMF meetings.

Zaidi joined the office on January 20 on the desire of Prime Minister Imran Khan and at that time he, too, was reluctant to come back, according to the sources.

In May last year, Prime Minister Imran Khan had appointed Shabbar Zaidi despite strong resistance from within the FBR. Zaidi tried to change the FBR’s culture and also introduced some good policy initiatives.

Before becoming the FBR chairman, Zaidi was working as senior partner at AF Ferguson Chartered Accountancy firm.

Zaidi’s efforts were marred by unrealistically ambitious revenue collection target of Rs5.5 trillion amidst low economic growth period, lack of focus on structural and administrative reforms and go-slow policy adopted by the tax machinery.

Although it was not clear whether Shabbar Zaidi would return to the office, the government does not have the luxury of time due to upcoming talks with the International Monetary Fund and preparations for a mini-budget to meet the revenue shortfalls.

The policy-level talks between Pakistan and the IMF would begin from Monday and one of the contentious issues will be the performance of the FBR.

The IMF has already cut the FBR’s tax collection target by Rs310 billion to Rs5.238 trillion.

The sources said the IMF was putting immense pressure on Pakistan to take additional revenue measures to achieve the Rs5.238 trillion downward revised target.

The FBR’s Member IR Policy has given a presentation to key state functionaries on the possible contours of the new mini budget, sources told The Express Tribune.

They said initially the government was targeting to withdraw sales tax exemptions.

However, due to the prevailing political conditions the political leadership was reluctant to impose heavy new taxes after slapping Rs735 billion worth of taxes hardly seven months ago.

January has turned out to be the worst month for the FBR, as it is set to face a revenue shortfall of around Rs100 billion in a single month.

As of second last day of the month, the FBR provisionally collected Rs290 billion as against the monthly target of Rs425 billion.

Against the original seven-month target of Rs2.78 trillion, the FBR has so far provisionally collected Rs2.375 trillion.

It is expected to generate Rs35 billion today (Friday), which is the last day of January. The cumulative shortfall in tax collection in seven months against the original target is going to be Rs370 billion.

The sources said work was already underway for replacing the chairman due to his health issues and low performance by the FBR.

Member, Administration, Nausheen Amjad Javed and Member, Customs Policy, Javed Ghani could be strong contenders for the post.

However, the sources said that the authorities were also considering the names of two other candidates — both of them are not currently serving in the FBR headquarter.

One is in grade-21 and the other is in grade-22 belonging to the Inland Revenue Service Group.

One of the weak points of Shabbar Zaidi was that he did not replace some of the FBR members despite their poor performance.

The FBR’s Member, IR Operations, is also currently on leave for the last about three weeks.

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