ISLAMABAD: Prime Minister Imran Khan publicized the appointment of renowned chartered accountant and tax affairs expert Syed Shabbar Zaidi as chairman of the Federal Board of Revenue (FBR). Finance adviser Abdul Hafeez Shaikh is taking its revenue-generation duties with utmost seriousness.
In the past as a chartered accountant he has been a consultant to many governments. But now comes a major challenge, where he has to actually deliver the results himself, how he does so without increasing the tax burden on those who are already compliant payers will be his biggest task.
The appointment comes days after the World Bank released a report saying that Pakistan is meeting less than half of its tax potential.
The surprising and counter intuitive conclusion of the report — called the Pakistan Revenue Mobilization Project — is that there is “substantial potential to increase tax receipts without imposing new taxes or raising tax rates”, according to the authors.
Enhancement in tax submission alone could virtually double the revenue potential of the country, from 13pc of GDP to 26pc.
Pakistan’s consumer price inflation in March rose to its highest since November 2013, hitting 9.41 percent year-on-year, before easing to 8.82 percent in April.
IMF is pushing Pakistan to embrace a more flexible rupee policy to end repeated boom-and-bust cycles, with many analysts arguing that the local currency is overvalued.
Mr Zaidi has knowledge with all the sectors. He has written about some of them himself, and has long been a champion of amending Section 111(4) of the Income Tax Ordinance.
“It is said that taxes are the price of civilization,” he wrote in a newspaper article in 2015. “There can be no state, and no rule of law, without proper revenue mobilization. And revenues do not come walking through the door of the tax authorities. They have to be assessed and levied at the pain of penalty.”