FBR Seeks Retention of 1,730 Posts Amid Automation Drive
Introduction
The Federal Board of Revenue (FBR) has made a formal request to retain 1,730 positions despite the federal cabinet’s directive to abolish 60% of vacant posts. The move comes as part of the FBR’s justification to maintain adequate staffing levels amid its ongoing automation and transformation initiatives. This article provides a comprehensive overview of the situation, focusing on the challenges faced by the FBR, its transformation plans, and the broader implications for tax collection and government operations.
FBR’s Request to Retain Vacant Posts
Background of the Cabinet Directive
In August 2024, the federal cabinet directed all government departments to abolish 60% of vacant posts to streamline operations and reduce unnecessary expenditures. This directive impacted all departments, including the FBR, which has 23,822 sanctioned posts, of which 2,883 are vacant.
- As per the directive, 1,730 vacant posts in the FBR must be abolished.
- These positions have remained vacant for years, yet funds are allocated annually for salaries, which are eventually diverted to other expenses.
FBR’s Argument for Retaining Positions
The FBR has sought an exemption from the cabinet’s directive, citing the following reasons:
- Critical Staffing Needs: Many essential positions remain unfilled, hindering operations.
- Transformation Plan Requirements: The FBR’s ongoing automation and modernisation drive require skilled personnel to implement and maintain advanced systems.
- Audit Capacity Challenges: There is a severe shortage of auditors, with only 355 filled positions on the IRS side, leading to inefficiencies in tax collection and post-clearance audits.
Key Points of the FBR Transformation Plan
Modernisation and Automation Initiatives
The transformation plan, approved by the Prime Minister on September 19, 2024, aims to overhaul the FBR’s operations through technology and process improvements. Key initiatives include:
- Faceless Customs Assessment and Examination: A move to reduce corruption and increase transparency.
- Post-Clearance Audit (PCA) Strengthening: Hiring technical experts to enhance audit functions.
- Customs Modernisation: Integration of advanced systems for valuation and risk analysis.
Staffing Requirements for Transformation
The FBR has outlined specific human resource needs to achieve its goals:
- 1,619 New Auditors: To address the shortfall in audit capacity.
- 100 Sector Experts: For large tax offices, with expertise in fields such as accounting, business finance, data science, and customs valuation.
- 25 Technical Experts: Hired through third-party firms to support the PCA directorate.
Financial Implications of Staffing
Budget Allocations for New Hires
The financial cost of hiring additional personnel for the transformation plan includes:
- Sector Experts:
- Rs348 million for the remainder of the current fiscal year.
- Rs1.3 billion for the next fiscal year.
- Technical Experts for PCA:
- Rs33 million for the last six months of this fiscal year.
- Rs73 million for the next fiscal year.
Challenges and Criticism
Concerns Over Efficiency
Former FBR chairman Syed Shabbar Zaidi has previously advocated for reducing the FBR workforce by 10,000 positions to improve efficiency. Despite automation, the FBR still relies on a large workforce, raising concerns about its ability to adapt to digitalisation.
Limited Training and Expertise
The FBR has acknowledged that its existing human resource lacks the training and qualifications required for specialised functions like post-clearance audits, further limiting its effectiveness.
Future Steps and Recommendations
Committee Review
The Cabinet Committee on Rightsizing has referred the FBR’s request to a sub-committee, chaired by Ambassador-at-Large Salman Ahmad, for further review.
Need for Balance
To achieve its transformation goals, the FBR must strike a balance between automation and human resource needs. This includes:
- Upskilling Current Staff: Providing training in data sciences, IT, and customs valuation.
- Optimising Workforce: Reducing redundant positions while retaining critical roles.
- Implementing Technology: Leveraging automation to reduce dependency on manual processes.
FAQs
1. Why is the FBR requesting to retain vacant posts?
The FBR argues that retaining these posts is essential to meet its staffing needs amid its ongoing transformation and automation initiatives.
2. What is the FBR transformation plan?
The FBR transformation plan focuses on modernising operations through automation, including initiatives like faceless customs assessment and post-clearance audit improvements.
3. How many posts are currently vacant in the FBR?
Out of 23,822 sanctioned posts, 2,883 positions are vacant, and the cabinet directive requires 60% of these to be abolished.
4. What are the financial implications of the FBR’s staffing needs?
Hiring additional sector and technical experts will cost Rs348 million for the current fiscal year and Rs1.3 billion for the next fiscal year.
5. How will automation impact the FBR’s workforce?
Automation aims to reduce dependency on manual processes, improve efficiency, and streamline tax collection, potentially reducing the need for a large workforce in the long term.
Conclusion
The FBR’s request to retain 1,730 posts reflects its need to balance automation with human resource requirements. While the transformation plan aims to modernise operations, challenges like a lack of skilled personnel and outdated processes persist.
The decision to grant the exemption will have significant implications for the FBR’s efficiency, government expenditures, and overall tax collection capabilities. A strategic approach that integrates automation with targeted hiring and workforce optimisation will be key to the FBR’s success in its modernisation efforts.
