The government seems to be determined to carry out
the major restructuring of Central Board of Revenue (CBR) and
implement the reform programme to make it more efficient, effective
and corruption free organisation as suggested by various committees of
exports both national and international. To achieve its objective, the
government has agreed to set up a high level watchdog body (Revenue
Reforms Commission) to effectively monitor/evaluate the performance of
the CBR and ensure timely implementation of tax administration reforms
by meeting revenue target and fulfilling World Bank conditionate.
The constitution of such a body has been considered
necessary for implementing the reforms agenda devised by experts
committees including donor agencies. The proposed commission will have
the authority to negotiate with international donors like World Bank
on all issues pertaining to the CBR who have undertaken to finance the
In the meanwhile a World Bank mission arrived
recently to discuss the CBR restructuring plan with tax authorities
and finalise its recommendations to meet financial requirements of
US$150 million for meeting cost of the plan during its three-week stay
The CBR has already communicated to the bank that
it required $150 million for restructuring plan. On the
recommendations of Pakistan tax consultant Maxwell Stamps and
International Monetary Fund (IMF), the tax authorities have
principally agreed to curtail the Central Board of Revenue (CBR)
members of six or seven from 17 under tax reform strategy to be
implemented over a period of six years.
The blueprint of the strategy revealed that the
functional members would operate in four management categories, i.e.
revenue operations (member customs, member sales tax and member direct
taxes); revenue services (member revenue services); management
services and policy and reforms (member policy and reforms and member
These members would work with director generals (DGs)
of different taxes. Sources said that presently, the management team
of the chairman comprises of 17 members, which was contrary to
international practices where only six-seven executives report to the
With such a large team of top tax managers, the
decision-making would become cumbersome for the chairman. Small number
of senior management would take part in decision-making process with
the chairman performing his intended role of chairing the executive
team and resolving issues of overall direction and policy.
The CBR's reform strategy focuses on significant
reduction in the number of tax officials directly answerable to the
chairman. This will be achieved through creating a smaller executive
team of the CBR. This team will meet regularly, under the leadership
of the chairman to discuss, plan, coordinate and direct the policies
and operations of the CBR.
Under the new structure, member customs would be
directly linked with the DG export and DG import: member sales tax, DG
sales tax and DG LTU: member direct taxes, DG direct taxes and DG LTU.
Member revenue services would work with the DG
intelligence: DG taxpayer education and facilitation: DG risk
management: DG investigation: DG collection and enforcement and DG
taxpayer audit. Member management services would deal with the DG
facility management: DG legal: DG human resources management: DG
information management system (IMS), and DG training and development.
Member policy and tax reforms would coordinate with
the DG project coordination and DG fiscal research and statistics.
Member internal audit would work with the DG internal affairs.
The sources also said that the first milestone was
evolving top level structure of seven streams reporting to the
chairman, i.e. customs, revenue services, direct tax, management
services, sales tax, policy and reforms and internal audit.
At later stage, it was envisaged that the three
revenue streams would report through a single channel, i.e. member
revenue operation thereby, reducing the chairman's direct reports to
the five members. Specialist revenue functions such as intelligence,
taxpayer education, taxpayer audit, etc., are brought together under a
revenue services members while the administrative and management
support functions such as IT, human resources, facilities management,
etc., are combined into a management services stream.
Furthermore, the CBR will set up regional hubs for
the following functional areas to provide technical assistance to the
line administrations across all tax administrations and ensure quality
assurance of the policies and procedures developed by the central
office of the same functional organisation.
Revenue services; intelligence and investigation,
taxpayer education and facilitation, collection and enforcement,
registration, return processing and accounts and audit function.
Management services include facility management, human resources
management, legal, training and development and information management
system and support.
In the short and medium term, whether reporting to
the chairman directly, or through member revenue operations, the sales
and direct tax stream will remain separate. However, a programme of
co-location had already begun and would be continued through the
establishment of addition Large Taxpayer Unit (LTU).