155 luxury vehicles have been prohibited from being purchased by the Federal Board of Revenue following a decision by the Prime Minister (PM) Shehbaz Sharif. It has been reported in the Express Tribune that the World Bank was also perplexed by the decision to spend Rs. 1.6 billion on the purchase of luxury cars, according to a report from the newspaper. In an interview with the scribe, a senior official told him that the Prime Minister had issued an order on Thursday prohibiting the Federal Board of Revenue (FBR) from presenting documents to the Central Development Working Group (CDWP) in order to obtain approval for the aforementioned plan.
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In the course of yesterday’s pre-CDWP meeting, the Ministry of Planning discussed the Rs. 19.6 billion investment project financing component (IPF) of Pakistan Raises Revenue (PRR), a $400 million project funded by the World Bank.
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This is the second time that the government has intervened in FBR matters in the past ten days in order to prevent management from making a decision of this sort. It was previously prohibited by the finance minister that the board of directors could misappropriate taxpayer funds in order to cover executive perks.
There has been a cancellation of the pre-CDWP meeting as a result of the intervention by the Ministry of Planning. A decision will be made by the Prime Minister after consulting with the Finance Minister, Ishaq Dar, on the matter.
There has also been a request by Shehbaz Sharif for a report from the FBR chairman regarding the proposal to purchase vehicles in contrast to his directives to maintain austerity due to the high risk of default associated with the proposal.
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In a statement to the Express Tribune, a World Bank spokesperson said:
[The World Bank] had discussed with FBR the possibility of financing a pilot of up to 25 Mobile Field Office vans as part of this effort (to improve tax compliance), which would be subject to expert evaluation of a rigorous business case as well as the development of a comprehensive monitoring and evaluation plan.It was also mentioned by the spokesperson that the World Bank is supporting the FBR with a number of innovative tax compliance measures. No mention of the luxury vehicles was made in the plan that was submitted to the Ministry of Planning, and no business case was presented to justify the purchase of 155 high-end vehicles as part of the plan.
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The media report cited an official document as evidence that an estimated Rs. 1.63 billion will be used to purchase vehicles from the government, which is equivalent to 8.6% of the funds allocated to the project. There was a need to upgrade the outdated IT equipment in the FBR, and these funds were available for that purpose.
After the media raised the issue of a possible irregularity in the current economic situation, the Prime Minister halted the plan before it could start moving forward.
