Expanding the tax base and strict implementation of policies that counter tax evasion are two major pillars of the country’s economic discourse. Yet, it is quite revealing that over 10,000 employees of the top tax authority, the Federal Board of Revenue (FBR), are non-filers and are evading the tax net. It is unfortunate because if the highest tax-collecting body in the country lacks internal accountability and a sense of responsibility, little can be expected of other people.
With an approximate workforce of 25000, 1700 employees are above grade 17. However, a large majority of below-17-grade employees are non-filers. But this does not lift the burden off the shoulders of officials in high-grade positions as they have also been found not complying with the standard tax procedure. The persistently low compliance rate among higher-grade officers also indicates a systemic issue.
This large-scale evasion in the last two years raises significant concerns over internal scrutiny. It also puts the whole tax regime in jeopardy. Habitual non-filers within the FBR indicate massive loopholes within the system. Add to that, the fact that FBR officials are granted an extended date for filing returns and yet they cannot care less about it, which is very eye-opening. It also indicates a parallel system of privileges which sets the internal employees apart from ordinary citizens. Such discrimination erodes public trust in institutions.
After these disturbing revelations, the government and the Inland Revenue Service must act quickly and devise a strict checks and balances system within the FBR. All the employees must be brought in the tax net. This trend within the FBR must also catch the attention of policymakers regarding collecting taxes from low-salaried employees. The discussion has been going on for quite some time, where people with nominal monthly incomes have expressed dissatisfaction with the tax mechanism. It could be one of the reasons why below 17-grade employees in FBR are running away from the tax cycle.
In any case, tax law must apply to everyone equally. If people with moderate salaries are paying taxes outside the FBR, so should the people inside FBR who fall within the same earning range. Robust checks are essential and the tax body should not be allowed to go easy on its staff and officials. Transparency within will translate into transparency outside.