The Federal Board of Revenue’s (FBR) recent strategy is openly disclosing the names of the parliamentarians and their exact tax returns seems to be effective, the public attention has forced them to be more forthcoming, and as a result the amount of revenue collected has increased by 88%, compared to the last fiscal year. While the immediate strategy and its result are commendable, it does pose questions for the FBR when it comes to their national tax regime.
The dramatic increase in amount paid by tax paid by the parliamentarians could only mean two things, either each and every single one of the generated massive profits compared to last year or that they had failed to disclose the totality of their assets before, and increased pressure has forced them to be more transparent. No one would disagree that the later policy is closer to the truth. While the FBR is celebrating the increase in revenue there still remains 129 parliamentarians who have yet to file their tax returns. The FBR maintains that it is following the due process in these cases, and eventually these members will follow suit too. But the whole episode, the hidden assets, the increase in revenue in this fiscal year, and the 129 non-filers, does illustrate quite aptly the fragility of the FBR. The recent success has come about through its strategies, true, but it must be noted that the strategy relied on outside public scrutiny and attended pressure rather than any internal mechanism of ensuring compliance. Even now, it is unclear how much of the parliaments assets are actually declared, after all the FBR did content itself with the tax return for the previous fiscal year, which this year’s returns have proven to be a misleading one.
This is not to say that the FBR is a completely ineffective organisation, in the recent past it has made several gains towards achieving a more accountable bureaucracy, but when it comes to the rest of the nation the department falls woefully short of the mark. Major industries, media houses and conglomerates do not pay their taxes, let alone the common man. The increase in the revenue generated from the parliament is a fluke; predicated on public scrutiny, which will scrutinise the public itself? The FBR needs to expand its efforts towards strengthening the national tax net, the weakness of which remain the root of Pakistan’s troubles.