Submitted By

M Haseeb Ahsan. Roll#57

Submitted To
Dr. Amir Saeed

IAS University of the Punjab

Subject: “Comparative Public Administration”

Department: Institute Of Administration Sciences

Class & Section: MPA & (B)
Session: 2017-2019
 Ethical issues in Federal Board of Revenue

Introduction of FBR

FBR is a semi-autonomous federal agency of Pakistan that is responsible for enforcing fiscal
laws and collecting revenue for the government of Pakistan FBR primarily operates through its
main collection arms comprising Regional Tax Offices (RTOs) and Large Taxpayer Units
(LTUs) across the country. Website www.fbr.gov.pk. The Federal Board of Revenue abbreviated
as FBR) is a top federal government body that investigates crimes related to taxation and money-
laundering. Basically FBR is for the purpose of collection of money that produces revenue for
the country. The main objective of the FBR is to check the journal public monthly and annually
income and collect tax from these people. If anyone does not declare his income and not pay tax
to Government than FBR send notices for collection of tax.FBR is the Federal department which
is under the control of federal Govt. FBR Chairman declare different types of packages and
amnesties to increase the number of taxpayers. But in Pakistan FBR fails to collect tax according
to the targets set by the Government and some other people which are not registered as taxpayers
and evasion of their money in black money shape. FBR is the source for the public to convert
their black money into white but mostly people evade their money by unfair means and convert
their black money into white with wrong ways. It is also responsibility of FBR department to
find out the peoples who have the income up to taxable limit but did not pay tax. Next the ethical
issue is that FBR employees unethically evade the money of people and get bribery from non
taxpayer deal. Major difficulty in FBR that no one can clear his work without bribery if he is rig
ht or wrong. Now we detailed discuss on ethical dilemma.

Bribery an Ethical Dilemma in FBR

An ethical dilemma or ethical paradox is a decision-making problem between two possible

moral imperatives, neither of which is unambiguously acceptable or preferable. The complexity
arises out of the situational conflict in which obeying one would result in transgressing another.
It is recognized that in both developed and developing countries, the standard of tax collection
services are not properly provided to the general public and taxpayers. My basic proposal is
about the behavior of Tax department staff which is not satisfactory for taxpayers. The second
thing which has been seen in FBR is Administrative ethics; professionally staff has not the
qualities of moral standards. Senior commissioners, who are paid major salaries of up to 20,000
rupees a month, are involved in lucrative private practice in order to lead a decent life and thus
have no time or drive to care the taxpayers and general public. The other thing is that without
money no work has been done in FBR department and this is the darkest side of our Govt.
offices and this is administrative ethics which is applicable in FBR. Bribery also includes in
ethical dilemma because it is not good for the taxpayers and other departments. The basis aim of
this proposal is to find out the problem behind the unethical behavior of FBR department. Is the
bribery is main reason of bad attitude of FBR officers or some other reason, to find out these
reasons I will conduct some interviews of FBR inspectors and Commissioners and also conduct
interviews of some Clients of FBR like Companies. In this way we can find out the real reason of
this attitude because all things are important in all grounds may be this attitude is compulsory for
FBR staff to collect tax or may be some other reason. In above all facts would be able to reach
the result of this research and conclude a specific solution of this problem as ethical dilemma.
Corruption, Nepotism, Favoritism and bribery may be some reasons behind the unethical
behavior of FBR department.

To find out actual results I conduct an interview in FBR department detail of interview is as
follows.

1st Interviewee: Khan Shehzab (Assistant Commissioner Inland Revenue)

2nd Interviewee: Jahangir Shehzad (Officer Enforcement and Collection)

Q#1: What kind of hurdles you have been faced after implementation of any Policy?

Answer by 1st interviewee:

The basic problem after implementation of any public policy is the general public did not
think that policy is for the peoples and they have to get benefit from these policy but they think
any policy is burden for them and give negative responses. For example any policy regarding the
change of income tax or salary tax rate decrease all the peoples take it negative and give his
opinion that it is the way to capture the unregistered persons for collection of tax after
declaration of their salary income.

Answer by 2nd interviewee:

Some people start protesting against the policy which results to delay in implementation of
policy and that take lose of Government revenue. Protesting also takes case in stay orders that
falls as negative prospective which not only reach in breakeven but reach heavy losses. At the
department level it is very difficult for staff to face these types of persons.

Q#2: Are the Policies are made with the involvement of general public?

Answer by both:

Both replied the same answer “NO” because all the policies of FBR department is not produce
by grassroots level but all policies are made upper level or by higher authorizes decision only.
 Q#3: What are the problems of FBR Department?

Answered by both same:

All staff of FBR department about 90 % employees from lower level to upper level are corrupt,
in this condition if anyone has clean faith he cannot stable in department without acting wrong
ways.

Q#4 what type of ethical issues has in FBR?

Answer by both interviewee:

Basically FBR staff disturbed with customers thinking those who have lot of money are not
want to pay heavy taxes and go to in unfair means that they want to conceal their income, in this
way all business persons offer bribery to FBR employees and they take money from big business
holders and save their income from taxes by illegal way. Now the first and far most ethical issue
in FBR is the “Bribery”

Data Analysis

After observing the data which is collected from interview, it is clear that FBR department
has the ethical issue of Bribery. Every task are done with money and unfair means. In my
opinion all the policies in FBR department is made by higher authorities and no involvement of
public in policy making, as a result when policy is implemented on public and consumers it is
not working as the targets has been set. When policy is not working then some unintended
consequences has been arise. Taxes are not collected according to the targets which is set by the
Government and FBR department, because taxation polices are made according to the western
rules , these rules are only implemented in European countries not in Asian because their culture
and our country’s culture are very different. On the other side according to interview data which
policy has been made will fail and at last Pakistani Government has to face high losses. The high
losses and underdevelopment of FBR department is unintended consequences. If I am going to
2nd question of involvement of general public in public policy making, FBR department’s higher
authority has to take survey before introducing new scheme or policy. The simple way of
observation of common man is that to take the view point of common people by the time passed
and then it is easy for Government to understand the problems of the common people.
Government has to create social construction which tells the involvement of citizens in decision
making or policy making. Ethical issues creates in any department when policy is not working
well and administration by pass rules and regulations and try to get benefit from citizens by
unfair means, in FBR department employees and administration take money or bribery to done
every type of work they do not follow on government policies but interfere in government
regulation and use unethical arms which is not beneficial for administration as well as
government. In FBR there is no save of values of citizens or public, public values that provide
normative consensus about the rights, benefits, and prerogatives to which citizens should and
should not be entitled the obligations of citizens to society, the state, and one another. If we go to
social construction in FBR department it is necessary to interpretive approach which tells us to
understand social practices at various levels of organizational analysis. To understand the
interpretive approach the limits of positivistic and scientific approach should be studies. Both
deal with different methodologies. Neutral science applies general laws and rules and the other
side social science rely on experience. To remove the bribery and other immoral and unethical
activities it is compulsory for FBR department to involve the citizens in decision making and
save from unintended consequences. Actually every organization has its own ethical dilemmas
which vary from organizations culture to culture.

In developing countries like Pakistan have the history of ethical dilemmas in public
administration, this problem starts from pre colonial era and continues till today. After
conducting interview it’s clear that all polices which are implanted in developing countries
creates problem which is difficult to handle these problems.

Conclusion

Every organization has its own ethical dilemmas because of their culture is different from
every organization. If I talk about FBR department it is a government department, in government
offices every officer has its own responsibilities and regulation. When an officer did not perform
his duty on rules and regulation which are given by the government it creates problems which
lead to ethical dilemma. After analysis of interview and my own judgment in FBR department
mostly work has been done with money in simple words bribery. Employee has to strong work
ethic in his office because they lose any point of ethic they could not suffer his job according to
his duties which are applied by government. The basic issue in FBR is the Bribery from lower
level to top level every employee take money from private sector ends every citizen. In my
opinion it not only FBR employees responsible of bribery but also common people or citizens
involve in unethical behavior. Every businessman personally offers to FBR staff for bribery and
unethical movements because they want not to disclose his income or black money. In fact it is
the sad words for Pakistan that every is involved in unethical issues not only in FBR but also
other department of government. At the end it’s my opinion and result about FBR ethical
dilemma is Bribery which has been seems in the roots of department. We have to struggle to get
rid of this immoral and unethical issue.

Recommendations

My opinion about FBR department is that some tax reforms would be made and these tax
reforms include job duties which may change the employees. On the other hand it is the need of
government to aware the citizens about tax department and common people and business holders
has to think that the payment of taxes is beneficial for him and government, in this way bribery
can be removed by roots and Pakistan become a clean and believed country.