ISLAMABAD: Finance Minister Muhammad Aurangzeb approved the reconstitution of the Pakistan Revenue Automation Ltd (PRAL) board of directors on Saturday to expedite the digitalisation of the tax process.

The decision was made during a virtual Cabinet Committee on State-Owned Enterprises meeting led by the finance minister. The Federal Board of Revenue (FBR) has already established timelines for completely reforming the PRAL.

An official announcement said the meeting considered the recommendation of five majority independent directors and four ex-officio members by the board nominations committee as per sub-section (1) of Section 10 of the Enterprises (Governance and Operations) Act 2023.

It was pointed out that all the five members recommended for positions of independent directors were drawn from the private sector and possessed vast relevant experience in top management positions, as well as high-end professional qualifications, expertise, and academic background in law, accountancy, and management.

Restructuring

FBR Chairman Rashid Mahmood Langrial has already given a presentation to Prime Minister Shehbaz Sharif to seek formal approval for the reorganisation of PRAL. The premier was informed that FBR needed more procurement capabilities, resulting in a more than five-year delay in acquiring scanners and data centres to document the economy.

Private sector professionals inducted to achieve targets

Under the Pakistan Raises Revenue initiative, a loan deal with the World Bank was struck in 2019 to purchase scanners for Rs8.3 billion. However, the FBR has yet to process bidding.

The reform initiative also includes creating a new transparent procurement mechanism for the FBR and increasing capacity.

Under the terms of this agreement, Pakistan would be required to spend an additional Rs5.4bn on data centre purchases. Interestingly, the funds remain unutilised due to the FBR’s capacity concerns. The premier took this matter seriously and asked the FBR chairman to finish the project’s execution within the next few months.

The FBR will set up a separate procurement cell. The proposed criteria for PRAL improvements include approving a new cost plan by Oct 15. The plan has been drafted and is ready for the board of directors’ approval.

By the end of next month, the PRAL board will have finalised the revised employee remuneration package. Depending on the final cost plan, a new service level agreement (SLA) will be signed between FBR and PRAL by Nov 10. Hiring new resources and optimising existing resources will also be finalised during this period.

According to the official announcement, the finance minister lauded the step to have a majority of independent directors and select very prominent professionals from the SME sector to run the PRAL board.

He hoped the new board would be able to observe strong oversight and good management of PRAL to help achieve revenue generation goals.

The meeting was attended by Minister for Maritime Affairs Qaiser Shaikh, FBR Chairman Rashid Mahmood Langrial, SECP Chairman Akif Saeed and top officials from various ministries and agencies.

Published in Dawn, September 22nd, 2024