Home »Taxation » Pakistan » Taxation a collusive bargaining game: World Bank

  • News Desk
  • May 6th, 2017
  • Comments Off on Taxation a collusive bargaining game: World Bank
Taxation in Pakistan is a collusive bargaining game between taxpayers and tax officials, according to a recently uploaded World Bank (WB) Policy Research Working Paper, titled, "Who Serves the Poor? Surveying Civil Servants in the Developing World."

The paper states, in Pakistan, officials were asked whether the Federal Board of Revenue (FBR) claimed that taxpayers were compliant (a key responsibility of the Board) when actually they were not. Fifty seven percent (57 percent) of officials stated that this best described the FBR. When asked why the Board was making such significant errors in compliance assessments, officials foremost pointed to mismanagement (unclear regulations, managers given unclear instructions) rather than to corruption. Political connections were stated by only 16 percent of officials to be significant.

The paper further maintains that 50 percent of civil servants in Pakistan disagree with the statement that promotions/bonuses go to those who work hard to achieve the goals of the FBR. "Where we find the least evidence for merit-based advancement in Pakistan, officials state that ''''managerial favouritism'''' is exactly what is driving career paths," the working paper maintains.

On whether selection for the civil service is based on merit, the survey concluded that in Indonesia and Pakistan, the question was the extent to which respondents believed that the selection process identifies the best people for the job and the responses indicate that only 39 percent of officials in Pakistan believed this to be true.

In Pakistan, only 22 percent respondents in the 2010-2014 wave agreed that most people can be trusted and in the Philippines, it was a mere 3.2 percent of respondents. The average for all countries available is 24 percent. Splitting overall satisfaction by gender, there were no major differences in any of the six countries surveyed but in Pakistan 7 percent women more likely to state that they are satisfied with their public sector job relative to the private sector.

Pakistan''''s wage bill is only 4 percent of total expenditures, while public employment is 7 percent of total employment. The Ministry of Finance staff, FBR is under its administrative control, typically have some of the highest wages in government, making their wage relatively satisfactory compared with other ministries. However, this does not imply that a Ministry of Finance official is satisfied with his/her wage in a more general sense.

The working paper used direct surveys of civil servants for several countries but in Pakistan the survey was undertaken at a single body, the Federal Board of Revenue (FBR), across multiple regional revenue collection centers; and interviewed officials between grades 17 and 22 in the regional tax offices in Karachi, Lahore, Faisalabad and Islamabad.

The management of the FBR opposed the use of random sampling and felt it necessary to invite all civil servants in the target offices to undertake the survey. The survey was thus enumerated through e-mail, outlined by the survey firm as a key reason for the low uptake. The Pakistan survey focused tightly on a single sector, tax collection, and was therefore able to ask questions that investigate the subtleties of the sector in a more detailed way than with a more general survey.



the author

Top
Close
Close