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Old Tuesday, August 04, 2009
NARESHOAD NARESHOAD is offline
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Default Formation of two new service groups in FBR

Formation of two new service groups in FBR: summary to be moved to Establishment Division

ISLAMABAD ( 2009-07-19 04:45:42 ) :The Secretary, Revenue Division, would move a summary to the Establishment Division for immediate constitution of two new service groups ie Pakistan Revenue Services, and Customs Services, within the Federal Board of Revenue (FBR). FBR Chairman Sohail Ahmed told Business Recorder on Saturday that the FBR has moved a summary to Revenue Division Secretary for constituting two new occupational groups.

Under the reporting mechanism, the FBR Chairman has to move the proposals through the competent authority of the Revenue Division. The Secretary Revenue Division would subsequently forward the proposal to the Establishment Division for setting up new service groups, Sohail said.

Meanwhile, the World Bank has recommended to the FBR to prepare legislation to establish in FBR one or two new occupational groups that would be used in all new recruitment from 2009. The staff working in the Pakistan Revenue Service group will cover income tax, sales tax, excises and eventually VAT. All new recruitment from year 2009 will be done to one of the new groups.

The number of the new groups will be determined after an analysis to minimise the risk of legal challenge by affected parties. The FBR will design a conversion program for all FBR staff to transfer from current to new occupational groups. The FBR and the WB agreed that the functional reorganisation of tax administration, including constitution of new occupational group, necessary changes in all relevant laws and rules and issuance of notifications would be implemented by September 30, 2009.

According to WB, the new members and Directors-General of the revised organisation have been appointed and an integrated organisation is functioning at FBR headquarters. However, new challenges have emerged. The most sensitive and resisted issue is the integration of two FBR civil service groups--CEG and ITG--especially in relation to future career development and promotions.

To remove limitations and restrictions to integration, a number of legal and administrative adjustments have to be made. As recently agreed by top Ministry of Finance and FBR officials in Istanbul, to fully implement the functionally integrated RTO and LTU organisation, the Government of Pakistan will establish one or two new occupational groups--Pakistan Revenue Service, and Customs.

The FBR staff belonging currently to either income tax or customs and excise cadres will opt by a date to be specified to either remain in their current occupational group or join the appropriate new one. This decision will be irreversible. The staff choosing to stay in the current occupational groups will be assigned tasks according to their skills. Finally, the staff will be given a two-week period to decide whether to be transferred to a new occupational groups and the staff will be shifted accordingly.

As an initial step of this process, the Revenue Division will require the Establishment Division to prepare a proposal for the creation of the two new occupational groups indicated above. The Establishment Division will then take necessary actions and/or seek approvals and issue notifications. After this, the Revenue Division, or FBR, will seek changes of all the necessary related laws and rules, and the organisational structures of RTOs and LTUs will be amended, WB added.

Background of the issue showed that the FBR continued moving from co-location to integration, taking measures to complete the modernisation of its organisational structure and business procedures. In January 2009, the FBR took an important step in the direction of its modernisation. It approved an integrated organisational structure that eliminated Sales Tax (ST) and Income Tax (IT) wings and included a single operational Wing at headquarters responsibility of supervising the work of RTOs and LTUs.

The decision to implement a new organisation based on integration of core tax administration functions was made and cross-delegation of power by Commissioners/Collectors in the regional offices (RTOs and LTUs) was put into effect in May 2009. However, the FBR officers belonging to the Customs, Sales Tax and Federal Excise (CEG) group filed a legal complaint in the Islamabad High Court against the cross-delegation of powers and challenged the legality of this decision.

The Court accepted the claim and the FBR was ordered to suspend its application. The FBR followed this mandate and, as a consequence, a number of activities related to the FBR reorganisation were suspended and the integration of Income Tax and Sales Tax operational procedures at RTOs and LTUs was interrupted. Also, several decisions were reversed, including the organisational structure approved in January 2009.

Sources said that the authorities decided to continue the reform process. As a first step, the Income Tax Group (ITG) Officers Association and the CEG officers Association were called to discuss possibilities for an agreement that would allow the integration process to be continued.

As a result, on June 30, 2009, an Office Order was issued to establish a revised functionally integrated organisation at senior management level. This new organisation, headed by the Chairman, has 12 members working along four broad functional categories--Operations, Functional, Policy and Support. The regional formations will be directly supervised by two Members in the Operations Group (North and South). The member positions were equally divided between staff from both groups.

Under the next steps to implement organisational reforms, more steps for the implementation of organisational reforms were discussed in Istanbul (July 3-10 2009) with top FBR and Ministry of Finance authorities, and several agreements were reached. It would not be overemphasised that functional integration is indispensable and central for the modernisation process of FBR. The new and renovated political determination, expressed by the authorities, is critical for a strong drive focused on improving FBR effectiveness in the short term, sources said.

Source: AAJ Tv News.
http://www.aaj.tv/news/Business/141697_8detail.html
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