FBR demotes 11 officers for reporting wrong tax collection

ISLAMABAD: Salman Siddique Chairman Federal Board of Revenue (FBR) on Friday announced the outcome of the investigation carried out against the officials involved in wrong reporting of tax collection for the 2010-11 and informed the legislators that commissioners of the 11 regional tax officers have been demoted one grade lower and been removed from lucrative post.

National Assembly Standing Committee on Finance met under the chairmanship of MNA Fauzia Wahab on Friday and expressed its satisfaction over the action of demotion in the existing grades and removal from lucrative posts of senior tax officials who were directly responsible for wrong reporting of revenue collection figures for 2010-2011.

NA Committee on Finance also gave clean chit to the FBR Chairman Salman Siddique on the issue of gross reporting of sales tax figures for 2011-2012 with the observation to punish those tax officials, who were responsible for creating embarrassing situation for the tax. The committee observed that Salman Siddiqui is not directly responsible for reporting of gross figures by the field formations. The committee members informed the FBR that they would examine the outcome of the inquiry being conducted by the committee headed by Finance Minister and further action would be recommended by the Finance committee in case it is not satisfied with the action taken by the inquiry of the Finance Ministry. In such a situation, the committee itself would recommend exemplary punishment for the tax officials involved in wrong reporting of revenue collection figures.

The FBR chief also clarified his position on the issue of misleading figure announced in media about the revenue collection for 2010-2011 and he accepted responsibility of his debacle and offered himself to step down before the committee. He said that the gross revenue collection figures were mistakenly forwarded by the RTOs and action against these RTOs has already been initiated.

Explaining the whole issue of gross and net reporting of revenue collection figures before the Finance Committee on Friday, Salman Siddiqui admitted the mistake as head of the institution and offered his resignation before the committee. He said that when it has came to his notice that the actual net collection was Rs 1550 billion for 2010-2011 as compared to the announced figure of Rs 1590 billion on June 30 night, he also offered his resignation to the Minister of Finance. “I offered myself to step down from the post of FBR Chairman,” he remarked. He admitted that there was a pressure on the FBR to meet the ambitious revenue collection target of Rs 1588 billion by end June 2011. Till May 2011, the revenue collection figures were reconciled and confirmed. In June 2011, the monitoring of revenue collection figures was done on daily basis. On June 29, the FBR was required to collect Rs 81 billion for meeting the target of Rs 1588 billion for 2010-2011. “However, what happened on June 30 night, you can say it was due to excitement, jubilation or stupidity,” Salman Siddiqui categorically said.

He further said “we were directly getting information from the field formations and issue came to the light when the data reported by the field formations was not matching with the electronic data.” “The data was crosschecked with the field formations and it was transpired that some RTOs have reported gross figure of sales tax,” he stated.

He said that 11 out of 21 RTOs and Large Taxpayer Units (LTUs) have given gross figures of sales tax without excluding refund figures despite the fact that access of electronic refund data is available to all RTOs. It was not a mathematical error by the FBR, but certain RTOs have reported gross figure of sales tax instead of net revenue collection figure.

When committee members asked whether heads of these RTOs etc have been suspended, FBR chief said that the responsible tax officials have not been suspended. However, these tax officials have been downgraded and transferred to the Board. An inquiry has also being conducted by a committee headed by Finance Minister. The whole issue happened on the Inland Revenue side, but the FBR Customs Wing has surpassed the annual target for 2011-2012. – Dailytimes