PESHAWAR: The appointment of Shabbar Zaidi as chairman of the Federal Board of Revenue (FBR) has been well received in the business community of Khyber Pakhtunkhwa as its representatives termed it a step in the right direction to rectify the inertia-ridden tax system in the country.
They said Shabbar Zaidi’s posting is the first example of the appointment of the “best and the brightest” to head the “somewhat professionally disused” FBR and make it a well-organised and proficient tax collecting and leading policy level revenue entity. Shabbar Zaidi, whose appointment was notified as chairman FBR on Thursday, assumed the charge of his office on Friday on an “honorary and pro bono basis for a period of two years.” The business leaders in Khyber Pakhtunkhwa remained upbeat about Shabbar Zaidi’s appointment, saying that this may be the first dent in the status quo in the bureaucratic revenue collection regime in the country that has broken down completely.
Supporting Prime Minister Imran Khan’s decision of appointing Shabbar Zaidi as FBR chief, the traders and business leaders felt the decision will auger well for raising revenue generation and expanding tax net, besides overcoming anomalies in the FBR and its working vis-à-vis tax collection targets. They also referred to the FBR’s new chief first directives restricting the tax officials from harassing the tax filers and freezing their accounts and said that it was one of the long-standing demands of the business community. However, some of them feared that Shabbar Zaidi may be able to deliver as he will face non-cooperation from the FBR officials who considered his appointment as an encroachment on their professional domain.
But a senior bureaucrat, who wished not to be named, did not buy this assertion and said that “this is no apostasy to induct experts from the open market, that’s what being done across the world.” “A bureaucrat may be a man of many talents but economic, financial and fiscal matters, commerce, revenue and tax, etc are highly technical areas that need operational specialization to be dealt with,” he added.
Faiz Muhammad Faizi, president of the Sarhad Chamber of Commerce and Industry (SCCI), said besides being a tax expert, Shabbar Zaidi is a credible person. “We in the business community are relaxed and very confident that lacunas in the tax system would be removed under his leadership. We are hopeful that FBR would now work in a professional way and the dream of expanding the tax net would come true. The target of accurate tax collection would be achieved,” he opined. “Look at his first orders that no account would be sealed without 24-hour prior intimation to the holder. It reflects the sign that he will take business-friendly course in tax collection,” Faizi noted. Fuad Ishaq, Chairman Pakistan Horticulture Development & Export Company and leading exporter said it was a wise step to bring in a trained professional who is an expert in accounting and taxation.
“This is definitely going to change the tunnel-thinking approach towards collection and rates of taxation. The normal bureaucratic approach has always been to keep on raising the rates and percentages of taxes to achieve the revenue collection targets, which ends up in further tax avoidance. We definitely needed a professional like Shabbar Zaidi who is aware of the system and the relationship between the taxpayers and tax collectors. He has all the capacity and capability to deliver,” Fuad Ishaq asserted.
Muhammad Ishaq, former vice-president of the chamber and a leading businessman, however, sounded pessimistic saying, “it will be near to impossible to implement whatever reforms and changes he (Shabbar Zaidi) has on his agenda, as he will face stiff resistance from the FBR officials because he is an outsider who used to plead tax cases before FBR officials.” Zahidullah Shinwari, another business leader who has served on tax bodies of the Federation of Pakistan Chamber of Commerce and Industry, FBR and SCCI, also welcomed Shabbar Zaidi’s appointment and initial orders. However, he too saw tough challenges for him ahead. He said the FBR had pledged to the International Monetary Fund (IMF) that about Rs700 billion tax exemptions to some sectors including poultry, agriculture, etc would be done away with, but it could not be done. He said a committee had been formed by former Finance Minister Ishaq Dar for the purpose and he was also its member. However, he said no serious work was done to withdraw these huge exemptions which would now again be one of the massive challenges for the new FBR chief.