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Adil Memon · #35 Sunday, September 13, 2009

FBR creates two new occupational groups under TARP: IMF major condition fulfilled

RECORDER REPORT

ISLAMABAD (September 13 2009): The Federal Board of Revenue (FBR) has fulfilled a major condition of the International Monetary Fund (IMF) by creating new occupational groups ie 'Inland Revenue Service' and 'Pakistan Customs Service' under Tax Administration Reform Project (TARP). In case all the officers of Customs and Excise Group and Income Tax Group opt for new Service group, the name of new service would be 'Pakistan Revenue Service'.

An Anomaly Committee has also been constituted to handle issues relating to the new occupational groups. Sources told Business Recorder on Saturday that the 'Inland Revenue Service' has been set up covering income tax, sales tax and federal excise officials. This service group would be responsible for carrying out the functions relating to income tax, sales tax and federal excise.

The existing Customs and Excise Group will be renamed as 'Pakistan Customs Service'. Each officer of the existing Customs and Excise Group and the Income Tax Group has been called upon to exercise option for inclusion in the new 'Inland Revenue Service'. In case no option is given, it would be deemed that the officer desires to remain in his/her original group. For further details related to the size of the new group, fixation of seniority etc, the FBR added, the FBR had informed the IMF that under the new structure, the responsibilities for sales, income, and excise taxes will be consolidated in one domestic revenue department. To reduce the risk of renewed legal challenges, a new occupational group encompassing the staff of the newly created department will be created within the FBR.

The new FBR management structure was put in place as of June 30, 2009 (by an Executive Order of the FBR Chairman) and the functional reorganisation of the FBR, including the revision of the structures of Regional Taxpayer Offices (RTOs) and Large Taxpayer Units (LTUs), will be completed by end-September 2009. In this connection, the FBR on Saturday issued instructions to the Directors-General of Large Taxpayer Units (LTUs), Regional Tax Offices (RTOs) and Chief Collectors of North and South.

According to FBR instructions, the proposed set-up has to be circulated among all officers of customs and excise and income tax groups under administrative control of respective DG/Chief Collector and obtain irrevocable option from each officer of the existing Customs and Excise Group and Income Tax Group for inclusion or otherwise into the new Inland Revenue Service. The option so exercised in each case may be submitted to Member (Admn). FBR by September 28, 2009.

According to FBR directive, in view of the ongoing Tax Administration Reforms that include reorganisation of FBR, it has been decided to create a new Occupational Service namely 'Inland Revenue Service' with immediate effect.

All business concerning Income Tax, Sales Tax and Federal Excise currently being done by the officers and staff of income tax and customs and excise groups has beentransferred to the new 'Inland Revenue Service'. Existing Customs and Excise Group will be renamed as 'Pakistan Customs Service'.

The instructions further said that FBR shall seek from each officer and staff of the existing Customs & Excise Group and Income Tax Group an irrevocable option for inclusion or otherwise into the new 'Inland Revenue Service'. Such option once exercised shall be final. In order to facilitate the officers in this process, the FBR shall apprise each officer the number of posts which would form part of the new occupational service. Upon option, the seniority in the new service shall count from the date of regular appointment in the present post in the existing Customs & Excise Group and Income Tax Group in accordance with Civil Servants (Seniority) Rules. 1993, as amended from time to time. Upon receipt of requisite options, FBR shall proceed as under:

Under Scenario-I, in case, some officers from the Customs and Excise Group and some officers from the Income Tax Group opt for Inland Revenue Service, the shortage of the Inland Revenue Service shall be met by posting of officers of Customs Group and defunet Income Tax Group under Section 10 if the Civil Servants Act, 1973.

Depending upon number of options to be exercised by the officers of Customs and Excise Group and Income Tax Group, the tentative cadre strength of new Inland Revenue Service and Pakistan Customs Service may be as under (ie equivalent to existing combined strength of the Income Tax and Customs and Excise Groups):

New 'Inland Revenue Service' would cover 218 federal excise officers, 978 income tax officials taking total to 1196 officials. In case of Pakistan Customs Service, 218 officials would cover customs officials. Upon completion of exercise of options, the exact cadre strength shall be finalised by the Establishment Division in consultation with Revenue Division.

Under the second Scenario-II, in case all the officers of the Customs and Excise Group and Income Tax Group opt for new Service, the Service would be renamed as "Pakistan Revenue Service" with common seniority and doing all the revenue and tax business. All officers would be part of one cadre. The tentative cadre strength of new service may be as under (ie equivalent to existing combined strength of the Income Tax and Customs and Excise Groups):

Out of total 1414 tax officials, 218 would be federal excise officials, 978 would be income tax officials and 218 would be customs officials, taking total to 1414 officials. Upon completion of exercise of options, the exact cadre strength shall be finalised by the Establishment Division in consultation with Revenue Division, the directive said.

In both scenarios, the Income Tax Group officers not opting for the new service will remain in the existing Income Tax Group which will be a defunct and dying cadre without any future intake.

The inter se seniority of the officers of existing Income Tax and Customs and Excise Groups exercising option for inclusion in the new Pakistan Revenue Service or Inland Service, as the case may be, shall count from the date of regular appointment in the present post in the existing Customs and Excise Group and Income Tax Group in accordance with Civil Servants (Seniority Rules, 1993, as amended from time to time.

The FBR has further informed the field formations that all the existing posts currently forming part of Income Tax Group as well as those meant for federal excise business but currently forming part of Customs and Excise Group shall form part of the new Inland Revenue Service with immediate effect. The said posts will, however, be transferred to the new Service upon completion of exercise of option. Further recruitment to the existing Income Tax Group is stopped.

According to FBR instructions, effective from 2009, fresh recruitment to the newly constituted Inland Revenue Service or Pakistan Revenue Service as the case may be, shall be initiated through Federal Public Service Commission. Establishment Division's relevant O.Ms regarding constitution of existing Income Tax and Customs and Excise Groups shall be deemed to have been modified to the above extent.

To overcome the difficulties and interpretation of the methodology an Anomaly Committee is constituted comprising Additional Secretary-II, Establishment Division, Chairman FBR and Additional Secretary, Law and Justice Division whose interpretation shall be final subject to approval of Establishment Division. The Anomaly Committee and all others concerned shall ensure that the decisions contained in this official memorandum do not create any administrative complications, FBR instructions added.

Copyright Business Recorder, 2009