Dance couldn’t save FBR Chief Abdullah Yousaf
By Saleem Khan • Jul 25th, 2008 • Category: Politics • 35 CommentsThe government on Wednesday replaced the Chairman Federal Board of Revenue Abdullah Yousuf by cancelling his contract.
Waqar Ahmed, Secretary Board of Investment, has been appointed in his place, as per a notification issued by the Establishment Division. Abdullah Yousuf, considered to be the closest bureaucrat to President Musharraf, was tasked to run the prime federal tax-collecting institution in March 2004.
He got closer to Gen Musharraf by getting elevated to the highest quarters led by former prime minister Shaukat Aziz, with whom Yousuf made a team of economic managers that worked exclusively under the president’s instructions.
After Shaukat Aziz’s departure, it was being assumed that the days of Yousuf were numbered, but he sustained a number of political pressures and attempts by challengers who planned to grab his post.
Quarters close to President Musharraf said the most effective conspiracy was when a video of him dancing with Gen Musharraf was leaked to YouTube (http://www.youtube.com/watch?v=4QMC3×5xI9c), a US-based internet site which enjoys reputation for running exotic and scandalous videos fed into the system by contributors and video-sellers.
Yousuf, the longest serving chairman of the FBR (50 months), also launched reforms in the tax collecting machinery, which did not go well with many senior customs and income tax officials, who wrote against the reform plans to the president and the former prime minister.
But none of these officials could snatch his post, as Yousuf played his cards not only politically but also socially, having a wide circle of supporters at the top level in the federal capital and also abroad.
(source: The News)
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However such catamites when become old the user or the active partner discards the partner, as catamite at such an age does not remain the factor of gratification………….please read comma at this position.
I believe for all the hue and cry being raised against Abdullah Yusuf, the irony remains that facts critical to his work performance were never splashed up on the front pages while his “dance” performance was indeed.
Call it the hypocrisy of the people running the govt benhid the scenes or the ignorance of the general public to know about the work the man was really tasked about, for we as a nation indeed warrant more of scandalous stories as bedtime pep talks then the realistic facts and figures.
The fact is that despite being in the immediate lobby of the President and maybe deemed “indecent” by many people he brought a real change in the system of Tax Collection. He was the right man for the right job. And no-one ever raised issues with his working capacity.
The fact is that Abdullah Yusuf raised the Tax Collection revenue of this country from 408 billion to about 1024+ billion almost doubling it in a matter of almost 4 years or so, which had ever been done beofre in this country.
Just so as to inform all those around, he was removed as uncermoniously as Musharraf was being removed by Nawaz the only diff he was a burecreat. He was in Geneva and was to leave for Russia the same evening to sign some major accords.
Also Abdullah Yusuf had offered to resign at the start of the new Govt and as he claims it his resignation remained still in his drawer it was only that if Govt asked him he would have left the office.
God knows what maybe the truth but its his side of the story.
Another important unoffical fact is that the PM was as stunned by his immediate removal as was Abdullah Yusuf for the PS to PM issued his termination orders with no instructions from PM but some other concerned quarters.
And the newly based appointment no doubt is as competent as Abdullah Yusuf but it be reminded to all that he too was granted extension by the Musharraf-loobied caretaker govt. and that this move is more of seen as just a facelifting for the new govt that it is distancing itself from Presdiential aides and appointing its own which is contrary to the facts.
P.S. I have no relations for Avdullah yusuf neither have I met him, its just his performance that made me come out like this
The fact is that Abdullah Yusuf raised the Tax Collection revenue of this country from 408 billion to about 1024+ billion almost doubling it in a matter of almost 4 years or so, which had ever been done beofre in this country.
How???? Please elaborate. By Increasing inflation or monetary policy. Dear if some body is interested then he can find statistics that our Tax structure has been titled towards Indirect Taxes more from last 6 years. Direct taxes has been reduced and indirect taxes have been increased enormously.
Let me figure out how he increased revenue from 408 billion to 1024 billion. Each year Inflation was recorded as high as 12%…14%….11.9% and so one. The more is Inflation the more is Revenue for FBR. because FBR is collecting on average 25.97% of Sales Tax on each commodity i.e. reaching to end user from Factory. During his tenure he imposed 10% Withholding taxes on all telecommunication usage. previously it was Rs125 per bill or card. He has imposed more taxes on Low salary class and gave relief to High earning class.
If you will play in such a filthy way then tax collection is not a big challenge. Big challenge is to collect Direct Taxes.
I can not give credit to any body who is earning taxes by putting burden on poor class and giving relief to rich class by exempting high custom duties on luxuries items, by allowing tax relief to industrialists and moving that load on end users etc etc.
Lets see what the new FBR chief do. Practising same old practice by relying on indirect taxes….
Mr. Saleem Khan,
You mentioned “Each year Inflation was recorded as high as 12%…14%….11.9% and so one.”
From where did you get the inflation data of prior years?
Thanks in advance,
Mustafa
Quite sad of what is done to good and hard working government workers. It is a great loss to Pakistan. Though I believe Mr. Yusuf is most likely, quite thankful that he got sacked.
Dear Mustafa,
It is not exact figures of Inflation. But Government always showed us these figures. That were between 11% to 14%. and on food items they portrayed 8% to 9% Inflation. Actually real inflation was more than the said figures.
My topic was not to discuss inflation accurately in comments. It is mentioned to tell that how we increased Indirect taxes or collected 1024 billion. On other hand, government expenditures also increased enormously in last few years so it is useless to say that we collected 1024 billion because right now no development expenditures are above 1.5 trillion of Government. means… shortage of funds to run country….
Dr Alshaer,
He wont be thankful at all. He used his all resources to be on the seat. But one day every body has to leave his position. Nothing is constant. Only thing is that they should do some thing good for nation so people can remember them for long time.
Saleem, if nothing else, I will always remember him as a good dancer…:)
I do have a question, if anyone knows here.
Where did the money go, which was recovered by the FBR?
Yes there are many more who have been dancing at the tunes of President Musharraf where as the Orchestra Group playing its tunes at the back stage of this nation always remains the same. This is only the time which dictates that who comes up to dance and dances with whom?
While your clip was not responding; here are the clips of Chairman CBR Abdullah Yousaf dancing at the tunes of; Sanoon Nehar wala Pul tey bula key
http://www.youtube.com/watch?v=xU9Damy4cEk
http://www.youtube.com/watch?v=2Zzln8qye2k
And Musharraf dancing on Pakistan Day.
http://www.youtube.com/watch?v=4sUVpRLP5S4&feature=related
Yes there are many more who have been dancing at the tunes of President Musharraf where as the Orchestra Group playing its tunes at the back stage of this nation always remains the same. This is only the time which dictates that who come up to dance and dances with whom?
While your clip was not responding; here are the clips of Chairman CBR Abdullah Yousaf dancing at the tunes of; Sanoon Nehar wala Pul tey bula key
http://www.youtube.com/watch?v=xU9Damy4cEk
http://www.youtube.com/watch?v=2Zzln8qye2k
And Musharraf dancing on Pakistan Day.
http://www.youtube.com/watch?v=4sUVpRLP5S4&feature=related
ki mairay qatl k baad tu nay wafa say toaba
Saleem Bhai,
Thanks. According to information obtained from State Bank of Pakistan, inflation hit Pakistan at following rates:
2003 - 2004: 3.9%
2004 - 2005: 8.8%
2005 - 2006: 7.0%
2006 - 2007: 6.9%
2007 - 2008: 10.2%
Above are the trimmed figures, and on non-food and non-energy items, inflation rates were lower except in the year 2005 - 2006 (i.e. 7.5%).
You were right when you said that previous government had increased indirect taxation, but the reason you mentioned was not correct. Inflation during 90’s was much more than inflation during the first decade of new century. If inflation has a direct impact on increase in taxation revenues, then our previous governments in 90’s should have had increased the tax revenues much much more than in during the present decade.
Over the last ten years there has been a considerable increase Indirect Taxation. We were around Rs 200 billion in all indirect taxes in 2000. Now the collection for 2007-08 was over RS 600 billion. But, this phenomenal increase has resulted from:
- Increase in the size of GDP
- Increasing in the range of taxation
- Effective tax administration
Therefore, putting all the burden of increase in indirect taxation on Inflation is not right. Atleast, we should support those who worked hard.
Yes there are many more who have been dancing at the tunes of President Musharraf where as the Orchestra Group playing its tunes at the back stage of this nation always remains the same. This is only the time which dictates that who comes up to dance and dances with whom?
There are many crueler moons coming up our valleys!
Where did the money go, which was recovered by the FBR?
In foreign useless visits, in booking 5/7 star hotels, in non development expenditures, in increasing MNA/MPA’s salaries and benefits by 400% and lot more.
Not only FBR is source of income. Selling PTCL, KESCO, Ufone, Telecom Licenses and lot of other asstes which Government has sold in last 5 years to cover gap between Revenue and Expenditures…
But they not stopped here… They sold PIA owned hotel in USA, they sold a big piece of land in Kuwait which was gifted by Kuwait government for constructing our Pakistan Embassy and many more.
Only thing that remained safe is STEEL MILLS but the man who took action suffered.
Great Pakistani Leeches… They can’t generate revenue by increasing production but can sell National Assets one by one under slogan of PRIVATISATION.
Dr. Alshaer,
Pakistan is surviving in a very difficult situation. I am reproducing the extract from a recent speech of P.Chidambaram the Finance Minister of India:
“In the last four years, we have increased the tax to GDP ratio from 9.2 per cent to 12.5 per cent this year and next year it will be 13 per cent. This allows us to do what we have to on health, education, etc.
Secondly, our government has been extremely prudent fiscally. We inherited a fiscal deficit of 4.5 per cent; this year we have reduced it to 3.1 per cent, and next year we will reach a fiscal deficit of only 2.5 per cent. On the revenue side, we inherited a revenue deficit of 3.6 per cent, this year we have brought it down to 1.4 per cent, and next year we will bring it down to 1 per cent. Now what does this mean?
This means that I have more revenues, I have created fiscal space for the government to borrow more, if necessary, and I have created space for the Government in Parliament to spend on what they think are desirable objectives. The desirable objectives are, of course, education, health, rural infrastructure, drinking water, sanitation; You might ask what is there for industry. Well, infrastructure of industry is important. I believe we have laid the conditions for high growth and we have laid the pre-conditions for making this growth more inclusive.”
Similarly, in Pakistan, the tax revenue eased some of the difficulties of government and the whole nation in the past. We have seen some very good development works, specially in Karachi. Many residents who did not have drinking water since establishement of Pakistan are now provided with this very basic facility. There was no need to decrease the tax revenues by lowering sales tax because, as I mentioned earlier, GDP was very strong and Pakistan was among one of the fastest growing economies of the Asian region.
But what happened during 2007-2008, our GDP growth ratio fell down below expectation and currently, we are expecting a GDP ratio of less than 6% so a conservative and prudent approach should have been adopted by the present government whilst projecting revenues. But what these fools have done? They rather than decreasing the indirect taxes, increased them (one example is increasing sales tax from 15% to 16%).
The problem is, our nation does not know how to interpret figures due to less literacy ratio and we do not question our governments on their actions.
This is a joke that we are giving high sales tax while “enjoying” lower GDP growth.
2007 - 2008: 10.2% ???????
Please don’t go for such statistics which are based on some basket of items. Over all inflation is more that 22% right now in this year. Please consult any economist and he will elaborate it more.
As far your analysis about 90’s then dear I have not said at any point that 90’s was best period. I haven’t did any comparison of last FBR chief with any body else.
Inflation is the major factor of showing High GDP and collecting Indirect Taxes.
Let me give you very simple example as being a economic student also. My professor was qualified from Harvard University and made economic policies of few countries too.
Sugar price was Rs18/kg few years back. Government was collecting taxes of Approx Rs4.35 approx per Kg on it. In GDP, its contribution was of Rs18/-. Agreed. (because GST reaches more than 25% till commodity reaches end user)
As Sugar crisis was generated…it is proved that it was generated. Now don’t argue who did and who did not. my objective is different. Sugar Price reached Rs43/- at one time. Government started earning more than Rs 9/kg (even she claimed that we are getting a bit less tax on sugar). Now how much is contribution of same sugar was reflected in GDP…. Rs43/-… even production was same.
There are 2 kinds of GDP’s… Real and Nominal. Government always showed us Nominal GDP because it includes all inflationary effects. where as in Real GDP, economists minimizes Inflationary effects and that is the true GDP.
Note: My purpose is not to safe guard any other government here. I am simply telling that how figures are being manipulated for general public.
Now big blow for you…after confirming from authenticated resources… Ex Factory Price of Petrol is Rs36/- per litre but on what Price you are buying …even Government is claiming that it is giving Subsidy… RS86+/litre.
Now will this figure will reflect real on GDP…if Pakistan is producing some Fuel… No not at all.
If you want to see real effects of GDP growth rate of 6.5% or above then visit India. You will find results.
Arey Saleem Bhai,
I mentioned trimmed infaltion rate and 20% inflation rate is on food items. Sorry, even on food items, inflation in lower than 20%. some where around 17-19%. You have mentioned food and energy examples. And I did not include any food and energy related figures. I am talking about inflation as a whole.
Now let’s come back to your initial statement that increase in Tax revenue was due to increase in inflation, my brother, sales tax does not only include food and energy, so we have to take average figures of inflation.
And by the way, please read the following,
“The price of crude oil hit an all-time high of $139 a barrel this week - pushing the price of petrol to an average of 117p a litre for unleaded …………”. It will give you an idea of the price of petrol per litre excluding any taxes, duties, looties, mooties etc.
I think that only you know everything and rest of the economists are fools!
Look what financial times writes on June 30, 2008:
“The government spent $2.4bn during the fiscal year that ended on Monday to subsidise domestic fuel prices and protect consumers from a sharp rise in global oil prices. But this has resulted in a sharp increase in the budget deficit, which is expected to reach about 6.5 per cent of gross domestic product, leading to a rethink by government ministers.
”The deficit is unsustainable,” one government minister told the Financial Times. “We have to pass on all the increase in fuel prices to our consumers. By December 2008, there [will] be no fuel-related subsidies in Pakistan.”
The plan for a phased end to subsidies was confirmed by several other senior officials.
Pakistani consumers paid the equivalent of less that $75 a barrel of crude oil last fiscal year, the minister said. Even after the government raised the price of petrol by 10 per cent on Sunday, to Rs75.69 ($1.11) a litre, prices remain well below those paid in many developed countries.
To bring it into line with international market prices, Pakistan would have to raise the price of petrol by only about 20 per cent, officials said.
Prices of diesel and kerosene, which are used by far more people, would have to be raised by far more, potentially provoking political unrest. The price of diesel would have to be raised by 55-58 per cent while kerosene would have to be raised by 75-80 per cent, officials said.”
By the way which authenticated resources you consulted? Maybe, I am wrong and you being an economics student, I learn from you.
By the way Saleem Bhai, you wrote:
“Sugar price was Rs18/kg few years back. Government was collecting taxes of Approx Rs4.35 approx per Kg on it. In GDP, its contribution was of Rs18/-. Agreed. (because GST reaches more than 25% till commodity reaches end user)”
Please elaborate, I could not understand. Thanks.
Dear I am not claiming be the intellectual man of the world. I am simply using some common sense based on my education and experience. Why you are getting personal? Be positive during discussion.
The price of crude oil hit an all-time high of $139 a barrel this week - pushing the price of petrol to an average of 117p a litre for unleaded …………”……
Agreed… Can you please tell me the price Pakistan is paying for buying the crude Oil? How much Pakistan is generating from its internal resources and wells? Is we are paying billions and trillions for Gas too? No body can smuggle this gas/CNG too. Are we using weighted average rate for fuel because some how we are extracting crude oil from Pakistan too. If I agree that prices of Pakistan fuel should be 110% adjusted to International Market then why government officials are paying less to Saudi Arabia and Iran for same fuel? They should pay the same and don’t visit there for begging more fuel at cheaper rate. Government enjoyed enormous quantity of Fuel that is being gifted by Saudi Arabia for many years after Atom Bomb test.
Anyway this discussion will never end and I can’t rely on official figures totally. Most of them are manipulated for vested interest and showing growth.