Prime Minister (PM) Shehbaz Sharif has prohibited the Federal Board of Revenue (FBR) from purchasing 155 luxury vehicles. According to a report from the Express Tribune, the World Bank was also perplexed by the decision to spend Rs. 1.6 billion on luxury cars.
A senior official told the scribe that the Prime Minister issued an order on Thursday, prohibiting the FBR from presenting documents to the Central Development Working Group (CDWP) to obtain approval for the aforementioned plan.
The Ministry of Planning convened the pre-CDWP meeting yesterday to discuss the Rs. 19.6 billion investment project financing (IPF) component of the $400 million Pakistan Raises Revenue (PRR) project funded by the World Bank.
The government intervened in FBR matters for the second time in the past ten days to prevent management from making such a decision. Previously, the finance minister had prohibited the board from misusing taxpayer funds for executive perks.
After the intervention, the Ministry of Planning canceled the pre-CDWP meeting. The Prime Minister will now make a decision after consulting with Finance Minister Ishaq Dar.
Shehbaz Sharif has also requested a report from the FBR chairman regarding the proposal to purchase vehicles contrary to his directives to maintain austerity due to the high risk of default.
A World Bank spokesperson told the Express Tribune that:
[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), subject to expert assessment of a rigorous business case and the development of a comprehensive monitoring and evaluation plan.
The spokesperson added that the World Bank was assisting the FBR with a variety of innovative tax compliance measures. There was no mention of the luxury vehicles in the plan submitted to the Ministry of Planning, and no business case was submitted to justify the purchase of 155 high-end vehicles.
Citing an official document, a media report highlighted that an estimated Rs. 1.63 billion for the purchase of vehicles is equal to 8.6% of the funds. FBR had secured these funds to upgrade its obsolete IT equipment.
After the media raised the issue of a potential irregularity in the ongoing economic situation, PM stopped the plan before it could be set in motion.
