Almost all economic growth theories have directly or indirectly acknowledged the critical importance of human capital development in an organization. Endogenous economic growth theory (EEGT), for example, holds that economic growth is a result of three factors: human capital, innovation and knowledge. The EEGT also suggests that economic growth is not a result of external forces but comes from within, 'the endogenous factors'. Based on this theory, it is not difficult to establish that the organizations compromising on human capital and knowledge systematically endanger their very existence. It is because the workforce of such organizations lacks necessary skills, knowledge, will to effectively deliver and the critical ability to analyze economic trends. In other words, knowledge-based organizations ultimately replace the inefficient and lethargic organizations. The EEGT also holds that the long run economic growth rate directly depends on policy measures aimed at building capacity of the work force, improving human capital development, and systematically increasing knowledge through research and development (R&D). Several case studies on human capital development, in organizational rehabilitation processes, indicate that the integrity of workforce improves with the improvement in their knowledge through increased R&D. In other words, the knowledgeable workforce has a better integrity gradient. The answer to the Prime Minister's concerns is, therefore, contained in the EEGT explaining how competent workforce, integrity and efficiency are intertwined.
Unfortunately, as of today, the FBR has awfully compromised over the most important factor of human capital development. The Inland Revenue Service (IRS), being FBR's most critical wing for tax collection and administration, is a weird amalgam of officers with shabby service profiles. There is a long list of officers who have managed to enter into the mainstream IRS seniority list through back door entries either by exploiting rules or through ill-interpreted court judgments. The IRS seniority list of officers can be divided into two broad categories: the Central Superior Service (CSS) officers, and the non-CSS officers. The non-CSS officers can be further divided into four sub-categories: the Inland Revenue Officers (IRO), the defunct Assistant Collectors directly hired by the Peoples Party PM in the 1990s, the auditors and the inspectors.
As far as the CSS officers are concerned, it is understandable that they are selected through a systematic rigorous selection process through the Federal Public Service Commission like other service groups. As such they are better groomed and equipped with necessary skills and knowledge to be elevated to higher echelons of the service ladder. They are career officers, and if provided opportunities to further build their capacity, with better level of human capital index and knowledge profiles. They are part of Pakistan Civil Service and selected through the countrywide combined competitive examination. In case of the CSS officers, the only need is to keep building their capacity so that they can effectively deliver at the senior most positions. Some of the CSS officers hold PhDs, M Phils and Masters from top universities of the world. All non-CSS officers are generally expected to fade away at junior level on or below BS-19.
It is generally a practice, in almost all occupational services and groups of the CSS cadre, that the CSS officers get promoted to the top most positions subject to fulfilling service conditions. However, FBR's IRS is perhaps the only bizarre organization that is said to have unjustly inducted non-CSS officers into the mainstream IRS officers' seniority list. These non-CSS officers were inducted into FBR in BS-16 as Income Tax Officers (ITOs), later named as IROs. The IROs batch was promoted to BS-17 as Assistant Commissioners in just three years and their seniority was fixed between 29th Common Training Program (CTP) and 30th CTP officers. As a result they were promoted to next grades with the same speed as the CSS officers. Now the entire batch of IROs has been promoted to the senior positions of Additional Commissioners (BS-19) working all over the field formations in Pakistan. Now the entire IRO batch is part of mainstream IRS merit list ready for promotions to BS-20 in about two years. It is widely believed that between 2023 and 2030, most Chief Commissioners, Members and even Chairman could be from the non-CSS IRO cadre. This is the biggest compromise that the FBR has made as an organization towards human capital development. The induction and highly accelerated promotions of non-CSS officers is indirect collision with the recommendations of the EEGT.
(To be continued)
(The writers, lawyers and partners in HUZAIMA, IKRAM& IJAZ, are Adjunct Faculty at Lahore University of Management Sciences)