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REVENUE is the prime source of a government's income from which it meets its development and other expenditures. The cost of maintaining the government's huge administrative juggernaut is also met from the same source called revenue. So, the performance of a government is crucially dependent on how efficiently it runs its revenue department. A flabby revenue administration, therefore, ultimately results in an inefficient government. Although revenue and the department that looks after it are so important for the government, it is rather a recent development that these twin subjects have come under such a closer scrutiny than ever before. This fresh attention to the issue of revenue, however, has not been due to the fact that the government has all of a sudden become alive to it. On the contrary, it is again one of the multilateral capital donors, especially, the International Monetary Fund (IMF) that has brought its pressure to bear on the government to reform its revenue regime and thus increase its efficiency. The aim of this reform is to transform this vital organ of the government from its present status as a wasteful, porous and corrupt entity into an efficient and gainful one.
Whatever is the source of the government's motivation, there is still no denying the fact that the revenue administration of the country is in the urgent need of a complete overhaul. The latest move in this direction is the plan of the National Board of Revenue (NBR) to create a separate cell under it to conduct the audit of the organisation. At present, the same task is carried out by three wings of the department at the same time -- the customs, the Value Added Tax (VAT) and the income tax. The creation of a separate cell will therefore not only bring the existing cumbersome system of auditing by different wings of the NBR under one roof, it will also contribute to economising and downsizing the entire auditing set-up of NBR. The single unit approach will also reduce a lot of overlaps and double-counting in the present revenue administration. There are also other aspects of the revenue collection system that would become more transparent in this new integrated system of auditing. One may cite here the case of consistency of the VAT paid by a company with the tax paid on the earnings of the same organisation by the income tax department of the NBR. These are but a few of the benefits the government may be able to reap from the new system of unified auditing under the NBR.
But one must not also expect too much from such auditing of NBR's book of accounts from under a single roof. For auditing can only examine the correctness of the accounts once the figures relating to the income and expenditure of the revenue department are entered in the book of accounts. What happens in the field where the tax people are collecting the revenue is beyond the control of the audit cell whether integrated or diverse in form. And all the talk of bringing about efficiency and stopping leakage in the system will come to nought if the revenue people engaged in their different tasks are not able to change their attitude lock, stock and barrel.
The finance minister has often been critical of the people's attitude towards tax. True, many still fight shy of tax people. But this shyness is not wholly attributable to the citizens' inherent nature. Lack of proper awareness apart, the common citizens often look at the tax collectors with fear and mistrust. And as everyone knows, their fear is not also unfounded. So, side by side with the structural innovation in the revenue collection regime like the present one in the form of a single unit auditing system, the NBR needs also to give the necessary orientation and motivation to the tax people in general. This should be done as part of a confidence-building measure between the revenue collectors and the taxpayers.
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