Pakistan Revenue Automation Limited board begins operations without conflict of interest disclosures

The newly appointed board of Pakistan Revenue Automation Limited (PRAL), responsible for modernising the Federal Board of Revenue’s (FBR) IT infrastructure under a Rs3.7 billion restructuring plan, has started operations without first obtaining conflict of interest declarations from its members, a requirement under the State-Owned Enterprises (SOE) Act and SOE policy.

The Express Tribune reported that the omission raises governance concerns as the board makes key policy decisions without verifying that its members have no direct or indirect conflicts.

The SOE Act and the Companies Act 2017 mandate that all directors and managers sign a declaration confirming their compliance with conflict of interest policies and the organization’s code of conduct. Failure to do so can result in removal from office. 

Despite these legal obligations, sources indicate that the board has been holding meetings without ensuring compliance with these provisions.

The board, which Finance Minister Muhammad Aurangzeb and FBR Chairman Rashid Langrial have praised as highly capable, includes independent directors Salman Akhtar, Dr. Muhammad Fareed Zafar, Ehsan Saya, and Nazish Afraz. In its latest meeting, the board approved several initiatives, including forming a dedicated data wing for analytics and governance, setting up an Apex Committee for project approvals, and creating structured software development teams.

Concerns have also been raised over PRAL’s decision to hire 50 data experts through a third-party firm, with sources warning that this could compromise the security of sensitive taxpayer information. PRAL has already invited bids for third-party hiring, with a submission deadline of March 4.

The restructuring of PRAL, backed by a Rs3.7 billion supplementary grant approved by the federal cabinet, is aimed at enhancing the tax system’s efficiency. From the next fiscal year, recurring costs for PRAL are projected to reach Rs4.5 billion. 

The initiative involves upgrading hardware, strengthening software development capabilities, and establishing an analytics hub. Despite its crucial role in tax reform, concerns over governance and data security remain unresolved.