Islamabad:
The International Monetary Fund (IMF) has asked Pakistan to tackle vulnerabilities in the top 10 government units that are at the “highest risk” of indulging in corrupt practice and also recommended credit -based appointments of heads in central supervisory bodies.
The bodies that the global lender has recommended for credit-based appointments in its governance and corruption diagnostic assessment report are the National Accountability Bureau, Securities and Exchange Commission of Pakistan and Competure Commission of Pakistan, according to government sources.
The government had committed to the IMF to publish the report at the end of July and provide an implementing plan for enforcing its recommendations by the end of October. However, the report has not yet been released and this delay is among the questions that contain the announcement of a staff agreement between Pakistan and the IMF for the payment of the next loan tranches.
Sources said the IMF has recommended the adoption and implementation of a risk -based approach to tackling corruption vulnerability in federal agencies. The recommendations include the publication of an action plan to mitigate risks in the top 10 government units with the highest corruption risks and macrocrocrocitic exposures based on a centralized assessment using previously established and publicly available criteria.
The global lender has also suggested that the Pakistan report report annually on the development of the implementation of the plan.
In one of the most important recommendations to improve the management of FBR, the IMF has recommended to publish the data on complaints, the number of officials examined for corruption, the number of persons sanctioned for corruption and the number of cases transferred to other enforcement agencies for action.
The IMF has prepared the report to improve governance in Pakistan, the rule of law and ensure that the justice system facilitates businesses and investments rather than becoming an obstacle. The report has been prepared after holding meetings with almost three dozen government departments, state organs, including with Chief Justice of Pakistan.
The IMF has prepared the report to improve governance in Pakistan, strengthen the rule of law and ensure that the justice system facilitates businesses and investments rather than acting as an obstacle. The report was prepared after consultations with almost three dozen government departments and state bodies, including a meeting with Chief Justice of Pakistan.
To ensure that the entities responsible for accountability and supervision of the government remain independent, the IMF also wants Pakistan to ensure that credit -based agreements in these organizations are added to sources.
It has proposed a review of the legal framework that manages the appointment of managers of key authority, including the Competition Commission in Pakistan, Securities and Exchange Commission of Pakistan and National Accountability Bureau, to promote merit -based, transparent and credible selection processes.
The recommendation comes at a time when the current SECP chairman is quitting, and the government is deciding whether to give him an extension or appoint his compensation. SECP is responsible for the supervision of business and stock markets, while CCP is responsible for ensuring competition in the economy.
The IMF has also proposed to establish the institutional independence of the auditor in Pakistan by changing its law. AGP is currently regulated by the Ministry of Finance. AGP performs the audit of the federal and provincial government’s accounts. However, its reports and findings often remain unimplioned. There are also problems about the quality of these audit reports.
The global lender has also found major deficiencies in the FBR’s weak management structure. It has suggested to strengthen FBR’s governance and efficiency by improving its organizational structure and better adapting supervision and management to reach core targets.
Among the important recommendations, the IMF has suggested to reduce the autonomy of FBR’s field formations and improve their ability to identify and address key rates. The existing laws provide extensive powers to a Class 20 officer in FBR, which in a democratic setup must be exercised by the federal cabinet or parliament.
The IMF has recommended that Pakistan should also publish a tax snack strategy by May next year, reducing SATS, schedules, special regimes, excessive withholding of taxes and prior taxes. The strategy should also include rationalization of the tax exemptions and the withdrawal of the rule that makes the powers of the FBR.
The IMF does not seem impressed with FBR’s performance. It has recommended to improve FBR’s operations’ responsibility by publishing the audit results regarding Pakistan Revenue Automation Limited within a year. It has also proposed to produce the original public report that tracks FBR’s response to major audit results, the sources added.
The IMF has also recommended to strengthen the function of the FBR headquarters by establishing the executive committees, reducing the autonomy of the field formations and monitoring the performance. The global lender wants a truly independent internal audit office for FBR by separating it from reporting to the member’s inland income operations.
It has proposed the independent revision of the FBR’s information technology system and the establishment of an internal affairs under direct supervision of the President FBR to enforce the integrity and anti-corruption policies within the tax machinery.
