Custom & Excise

[shoaibraza_pk]

Congratulations to all 37 Common.

There is a tug of war going on between Custom and Excise group Vs Income Tax group. The bon of contention is the sales tax which is currently dealt by CEG. ITG wants to retain sales tax which it relinquished in 1980’s to CEG, when it was worth of some lakhs. Now sales tax target for fiscal year 2009 is around 500 Billion the major constituent of total revenue generation i-e around 46% by FBR. It was told that it is not decided that sales tax and excise would be given to ITG and ITG will be named as PRS (Pakistan Revenue Service). Both CEG and ITG officers would be given option to join PRS of which once joined can not be discarded. ITG as a group will no longer exist and it is possible to give ITG officers a chance to go in Surplus Pool. Well there are so many things which will be settled down with the passage of time. But, in the nut shell it will affect the whole working patterns of CEG and ITG groups. There are around 200 CEG officers who are working in Sales Tax and Excise side. After PRS they will share burden with their remaining CEG officer (total Strength of CEG is around 400). It will affect promotion of CEG officers. All this mean, more power, influence and nuisance value will go to ITG and obviously less charm in CEG.
Please share views, information and comment in positive manner. Thanks

Shoaib Raza @ CEG 37 Common

[shoaibraza_pk]

Reforms cause income tax officers to strike
By Mubarak Zeb Khan
Dawn Wednesday, 01 Jul, 2009

ISLAMABAD: Defying the government’s move to change the tax reforms plan, income tax officers on Wednesday announced they would go on strike on the grounds that the reforms would hamper the whole system.



The representatives of the Income Tax Officers Association (ITOA) have urged the government to implement the tax administration reform program in its true spirit.



The customs and excise group on the other hand, has opposed the earlier changes in the reform project.



The reform process of the tax administration has entered a crucial phase as both tax groups are trying to use the reforms to further the position of their own department.



An executive member of the association on condition of anonymity told Dawn from Karachi that the income tax officers will wear black shoulder-bands, hoist black flags and treat Thursday as a day of mourning.



‘We will work with all this initial reaction but if the government does listen to our concern then we may go for pen down strike,’ he said, the association will also go to file a petition in the court in this regard.



Under the new setup, the government created two member posts for domestic operations — North and South. A senior member of the custom group has been posted as member operation for South, while an officer from the income tax group for North.



The income tax group in the resolution passed by ITOA decided not to report to the member for domestic operations in the South. ‘We will not work under Member Domestic Operation Ramzan Bhatti because he is the president of the customs association,’ he said, adding Mr Bhatti was one of the main filers of a petition against the income tax group in the Islamabad High Court.



He said that the copy of the resolution has been sent to the chairman Federal Board of Revenue (FBR), Adviser to Prime Minister on Finance and other relevant ministers.



‘We will first create awareness among the political hierarchy and then opt for other measures,’ he said.



Chairman FBR Sohail Ahmad told Dawn that the amendments were finalized in the recent meeting with the World Bank officials. He said the reform process would go as per schedule.



Answering a question he said that he made no distinction between the tax groups. He said the focus of the reform should be to increase the tax to GDP ratio. He said the creation of the Inland Revenue wing was against the establishment rules. ‘FBR has no authority to create a group,’ he said.



According to the resolution of the ITOA faxed to Dawn, which said the officers expressed deep concern, dismay and anguish at the patently illegal office order issued on June 30. ‘These are sheer violation of order No 1(1) Chief (Mgt) 2009, passed in consequence of the Islamabad High Court’s order on May 13, 2009 in Writ Petition No687/2009, which is still pending and the matter is sub-judice,’ the resolution said.



Hence the officers feel the need to report to member direct taxes and not to member domestic operations. The officers of the income tax group feel that the reform agenda ahs been reversed due to undue pressure of the customs and excise group.



‘This pressure is mainly against integration of function of sales tax and income tax as envisaged in TARP,’ it said.

[shoaibraza_pk]

ISLAMABAD: The fate of the $850 million third IMF tranche hangs in the balance following ‘inconclusive’ talks between a Pakistani delegation and Fund’s officials.
‘The International Monetary Fund has linked the release of the third tranche with the performance of the economy and fulfilling of the remaining conditions in the first quarter (July-September) of 2009-10,’ a source told Dawn.
Islamabad has failed to meet the commitments made in the $7.6 billion standby arrangement. It received the first tranche of $3.1 billion in November last year and the second of $840 million in March 2009.
The IMF officials will carry out next review of the country’s economy in September and that would determine the fate of the third tranche.
The third tranche was expected to be released by the end of June or in early July.
The IMF is reviewing Pakistan’s March-June economic indicators and measures taken in the budget 2009-10 ahead of giving a go-ahead for the release of the tranche.
A 23-member delegation led by Adviser to the Prime Minister on Finance Shaukat Tarin recently held week-long talks with IMF officials in Istanbul.
According to the source, the delegation accepted further harsh conditions.
Initially, the IMF and World Bank officials were convinced about 17.7 per cent increase in power tariff but later accepted to a 31 per cent raise, the source said.
The talks on the issue would start in Islamabad on Monday,’ the source said, adding that Pakistan was left with no option but to approach the US for some relief.
The IMF rejected long-hours of loadshedding as a reason for not increasing power tariff and advised the team to improve management to avoid public criticism. The Fund also asked the government to clear the Rs60 billion circular debt by the end of July.
‘The payment of circular debt itself will improve power generation,’ the source quoted the IMF officials. The commitments must be honoured, the delegation was bluntly told.
The source said the Fund had also proposed over a 20 per cent increase in the price of diesel as part of resource mobilisation. It also raised objections over the changes made recently in the tax administration reforms and asked for two mainstreams in the taxation system -- Customs and Inland Revenue.
The Pakistan team committed to the IMF that a notification establishing the two streams of taxation would be issued in early August and would be implemented from September.
Before the departure of the Pakistan team for Istanbul, the government had made amendments in the tax administration reform project (TARP) to address the concerns of the customs group which was opposing the establishment of the Inland Revenue for the merging of sales tax into income tax.
The government established the Inland Revenue but the customs group challenged the decision in the Islamabad High Court which gave an interim order to maintain the status quo.
A source in the finance ministry told Dawn that the IMF had also raised objections over revenue realisation and expenditure targets. ‘The revenue targets are overstated and expenditures understated,’ the IMF said.
According to the IMF estimates, the budget deficit would not be around 4.9 per cent but would rise to 5.5 per cent to 6 per cent because of the measures taken in the budget, including appointments of over 90 federal ministers and advisers.
The source said that to save the IMF programme, the Pakistan team contacted the president’s secretariat for issuing an ordinance to protect the Rs122 billion collection, otherwise the budget deficit would rise by another one percentage point.
An example of lack of coordination among members of the Pakistan team was on the issue of Value Added Tax (VAT).
An independent economist Hafiz Pasha, who accompanied the delegation, informed the IMF that it would not be possible to implement VAT from next fiscal year because of a possible resistance from the provinces. But, the finance secretary assured the Fund that there would be no problem in introducing the VAT.

[shoaibraza_pk]

Sir it's your gr8ness. It's really bad and making me worry. What i think is that the real issue tax evasion and not the reforms. and who the hell is IMF and WD which are not supposed to dictate us what sort of reforms we need. It's not good to change the structure of a group and even if reforms are inevitable then so it should not be like this way. hmmmm lets see how things settled down

[rmaftab_786]

Hi shoain bhai ist i would like to thank u for ur useful posts regarding latest updates about reforms in C&E deptt. CAN U PLZ UPDATE ABOUT THE LATEST DEV

RANA AFTAB
C&E
37TH COMMON

[shoaibraza_pk]

AOA .Congratulations Aftab. At least some one of CEG responded. If u have studied the above post u would have sufficient idea whats the issue between CEG and ITG. Lasted information is that a new service named PRS is to be formed and custom officials will be asked to join it which is irrevocable joining. The new service will be created by amending the civil service act by presidential ordinance, which later be approved by the Parliament. Some of ITG members in FBR approached IMF officials and told them that Govt of Pakistan is not sincere in implementing TARP (Tax Reforms which means transfer of sales tax to ITG). So, IMF asked Pakistan to implement tax reforms other wise IMF would not give next loan installment. this way Govt has to bow down before IMF as u can better understand our poor economic conditions so there was no other option. now it will affect the promotions of CEG officer and lets see how dust settle down.share your views
take care
Allah Hafiz

[rmaftab_786]

hi brother yesterday i went to custom house in lahore .Officers were also confirming the same news over there .lets see what hapens plz contact at my e mail address rmaftab_786@yahoo.com

[Amjad Aman]

Dear Shoaib,

Thank you for expressing ur concerns on the latest developments. I have also been in touch with some seniors on this issue. First, in my personal opinion the only constant factor in this life is change. I have completed seven years' service parralel to DMG officers in ex pcs; and have closely observed how demoralised and dejected these officers were during musharraf era. The group was nicked as ''Demolished by Musharraf Group'', ''De Moralized Group'' etc etc. But now look at the surge of DMG. Luck is surely shining on DMGs once again. But even during the Musharraf era, the graph of DMG was lately on a rise; keeping in view the group's mobility and involvement in day to day public business. So this is a classic example of how the historical services can prove their worth and regain the lost ground.

Now coming back to the latest developments relating Tax Administration Reform Programme. First, the Islamabad High Court has upheld the plea of the Customs group officers; that it is there right to have mobility of service in sales tax as they had joined the service group as Customs and Excise group and not only customs service. The matter is being contested now in Supreme court where customs group is being advocated by no less than Aitzaz Ahsan. According to a senior any change in the laws would be prospective and not retrospective. As we are going to join Customs and Excise group so it would be our rights to have mobility in sales tx also. The government is considering to bring this change from the 39th common onwards by renaming this group as customs service only.

So keep your fingers crossed. Wish you best of luck.

Blessings,
Amjad Aman Laghari
CEG 37th Common

[rmaftab_786]

The Federal Board of Revenue (FBR) is striving to establish Pakistan Revenue Service (PRS), which is one of the conditions of International Monetary Fund (IMF) to acquire the third tranche of the $7.6 billion standby loan.

Sources told Business Recorder on Saturday that the board has given the deadline of September 15 to Establishment Division for its constitution, and added that summary in this regard has been moved to the Prime Minister for approval.

Following the past poor experience pertaining to proposal for Inland Revenue Service (IRS), the FBR has decided to recruit fresh blood for the purpose, sources said.

They said that officials from customs and income tax groups have option to join 'PRS group' or continue the service in their respective groups. Furthermore, they said, the board could also exercise the power under section 10 of establishment rules to depute the officers from any group to PRS for three years.

"FBR is of the view that the existing income tax group was the driving cluster in the tax department; hence no new recruitment would be made in future," they added. They said that PRS is aimed to enhance revenue collection to create positive impact on tax-to-GDP ratio, which was posted at 9 percent in outgoing fiscal year.

They said the taxpayers are presently obligated to enrol in both sales tax and income tax departments, separately, to pay off their tax liabilities, while PRS would simplify the procedure by issuing single identity for both levies and would also discourage tax evasion. However, the officials from customs group are pessimist in this regard, and said that it could not provide any positive results unless the records of both systems would not reconciled in an effective manner.

They expressed apprehension over the issue, saying that records related to sales tax are not properly maintained, which creates difficulties for taxmen to share relevant information with other tax offices and urged the board to take remedial measures in this connection before introducing PRS.(Business Recorder)

rana aftab

37th common

[shoaibraza_pk]

AOA ,
Dear Amjad, hope you will be fine and enjoying after being in CEG.
Thanks for your fine information. I am very happy to find that Custom people are taking interest and coming into contact.

Well as far as CEG reforms are concerned I am very much with the soul and spirit of my group. I mean I will rise and fall with my group. In fact people of ITG want to reassert themselves on the cost of CEG which should not be acceptable to us, and even the reforms go into the favor of ITG, it does not matter we must be satisfied as our purpose is to serve Government of Pakistan and not to usurp the authority and power of some other group. Believe me Custom alone would be better than IRS or PRS. The thing which make us annoy is that when our senior members from ITG approach IMF officials and report them the GOP is not sincere in TARP reforms so please force GOP to implement TARP otherwise stop loan installments. There are different news against CEG in daily newspapers which are published on the demands of ITG and funded by them.
If a new service with the name of Pakistan Revenue Service is created by the Parliament. It could not be challenged by the CEG in any court. So, this time things are different as Govt is forced to implement TARP that is to collect Sales tax and income tax by the same officer of Inland Revenue service.
Any ways these things matter a little to us. Our seniors must be safeguarding our and their own interests efficiently. The only repercussion of sales tax to ITG would be that the promotions of CEG will be slowed down.
Take care and welcome commenst
Shoaib Raza@37 Common CEG