The appointment is for two years and will be on honorary basis / pro bono basis with immediate effect and until further orders, the notification read.
On Monday, Prime Minister Imran Khan announced the appointment of Shabbar Zaidi as new FBR chairman but he together with his cabinet were struggling to understand how to translate this announcement into reality due to plethora of challenges.
The conflict of interest and legal implications for making an appointment without following the due process of merit were two key questions raised by the Cabinet Division over the nomination.
A summary presented before the federal cabinet on Wednesday suggested making the appointment on an honorary basis to avoid litigation.
The conflict of interest and legal implications for making an appointment without following the due process of merit are two key questions raised by the Cabinet Division over the nomination of tax consultant, Shabbar Zaidi, as the new FBR chairman.
A summary presented before the federal cabinet in this respect has, however, suggested making the appointment on an honorary basis to avoid litigation. Prime Minister Imran Khan announced late on Monday the appointment of Shabbar Zaidi as new FBR chairman but he together with his cabinet are still struggling to understand how to translate this announcement into reality due to plethora of challenges.
Meanwhile, Jehanzeb Khan, whose removal was advertised through media has not been officially de-notified as FBR chairman and Shabbar Zaidi’s fate also hangs in balance. On moral grounds, he is facing a question of potential conflict of interests. On legal grounds, his appointment is prone to judicial scrutiny with a precedent already available in the form of the removal of Ali Arshad Hakeem in 2013 as FBR chairman.
The CV of Shabbar Zaidi “reveals that he has made representations before the Federal Board of Revenue on behalf of his clients for various clarifications and reconciliations. The existence of conflict of interest in his appointment as chairman, FBR/Secretary, Revenue Division may also need to be taken into consideration,” reads the summary of Cabinet Division presented before the cabinet late Tuesday. Likewise, the appointment of an individual from private sector isn’t possible without proper procedure that requires advertising the vacant post and selection of the best among the best. Alternative plan is to induct him on an honorary basis as chairman wherein he will have to work without salary. The government was insistent to pick Shabbar for the job, his refusal notwithstanding. A source close to him told The News that he was first contacted in this connection a few weeks ago. “He had refused to accept this offer,” according to the source. He was approached again on late Monday. This time, he was asked to suggest some names for the post and he did, according to the source. The government instead finalised his name and he came to know that through media.
As Shabbar submitted to the demand, he is now in an awkward position about his status as to whether and how he will be appointed. A summary by the Cabinet Division presented before the federal cabinet late on Tuesday is suggestive of the situation where government is confused about the likely mode of his appointment as the entire process is fraught with legal challenges. The former FBR chairman Ali Arshad Hakeem is a case in point referred to in the cabinet summary. His appointment was declared null and void by the Islamabad High Court after an FBR’s BS-19 officer challenged it on the grounds that proper procedure was not followed in his case. Consequently, Establishment Division was directed to make a regular appointment through a competitive process after advertising the post.
“Since express directions of the Court are in the field regarding appointment of FBR chairman through a competitive process, appointing Syed Muhammad Shabbar Zaidi without advertising the post as chairman, FBR, Secretary, Revenue Division, may tantamount to contempt of court,” according to the summary of Cabinet Division. The Establishment Division’s opinion wasw incorporated in the summary Keeping in view this situation, law ministry was asked for legal opinion “whether or not FBR chairman can be appointed from private sector in terms of Section 3 (3) of the Federal Board of Revenue Act, 2007,” reads the cabinet summary.
An alternative option is also under consideration for which legal opinion has been sought and that is of appointing him on an honorary basis: “Whether or not the post of chairman, Federal Board of Revenue is required to be advertised if the appointment is to be made on an honorary, pro-bono basis.” The government has already made such appointments without inviting legal trouble so far. Included among them is Chairman Prime Minister Inspection Commission, Ahmad Yar Hiraj and Chairman National Vocational and Technical Training Commission, Syed Javed Hassan.
ANTI BUREAUCRACY
The appointment of “a tax expert” as the new chairman of Federal Board of Revenue (FBR) has irked the tax officials, who have reportedly decided to challenge the appointment in a court of law.
According to sources, the appointment of “someone belonging to the private sector as FBR chairman was more surprising for the officials than the appointment of Ahmed Mujtaba Memon, a BS-21 officer”.
The appointment of Shabbar Zaidi, a prominent chartered accountant and former caretaker minister for Sindh, came at a time when FBR officials were unhappy over the reported appointment of Mujtaba Memon as the board’s chairman. The appointment of Memon was being opposed by senior officials of FBR, particularly the BS-22 officers.
On Monday, a placement committee comprising Adviser to Prime Minister on Establishment Shehzad Arbab, Adviser to PM on Institutional Reforms Dr Ishrat Husain, Minister Education Shafqat Mehmood and Adviser to PM on Finance Dr Abdul Hafeez Shaikh was scheduled to meet to decide about the new FBR chairman. It is not clear whether the prime minister proposed Zaidi’s name for FBR’s top slot in consultation with the said committee or not.
“Although there has been an FBR chairman from the private sector in the past, the appointment of Zaidi is not being welcomed by the FBR officials,” sources claimed, adding that some of the officials have decided to challenge the appointment, for which they may refer to a similar case of Islamabad High Court (IHC) in 2013.
It is pertinent to mention that IHC in 2013 had termed the appointment of former FBR chairman Ali Arshad Hakeem as illegal.
Petitioner Ashfaq Ahmed, a grade-19 officer of FBR, had challenged the qualification of Ali Arshad Hakeem. The bench, observing that the appointment of Hakeem was made without adoption of a competitive process, had directed the government to appoint a suitable person as FBR chief.
The Pakistan People’s Party government had appointed Hakeem as the FBR chairman on July 10, 2012. After becoming FBR chairman, Hakeem was also given the additional charge as secretary of the Revenue Division.
Counsel for the petitioner, Barrister Zafarullah Khan, had argued before the court that while appointing Hakeem as FBR chairman, the government relaxed at least 10 essential requirements.
However, referring to the fresh appointment, sources claimed that there was no prescribed criterion for the appointment of the FBR chairman.
On Monday, Prime Minister Imran Khan announced that Shabbar Zaidi would be the next FBR chairman. The appointment is yet to be notified, but the PM said it would be done soon.
According to details, Zaidi is a senior partner in A.F. Ferguson & Co, a member firm of Pricewaterhouse Coopers and has authored multiple books, including ‘Panama Leaks: A Blessing in Disguise–Offshore Assets of Pakistani Citizens’, ‘A Journey for Clarity’ and ‘Pakistan: Not a Failed State’.
He is well versed in Pakistan’s tax laws and key policy matters governing fiscal strategy, corporate regulations and foreign exchange regimes and has written extensively on the topics. He recently also advised the Supreme Court in a case concerning offshore assets owned by Pakistanis.
Reforms in FBR have been a challenge for the government which made tall claims of making the board an ideal institution of the country. However, despite laps of over seven months, no improvement in the taxation system is being witnessed. The FBR is currently on course to register one of the highest shortfalls of its history by the close of this fiscal year, anticipated to come in above Rs350 billion.
According to sources, former FBR chairman Jahanzeb Khan was shown the door owing to his poor performance with regard to revenue collection.
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Revenue