Lack of structural changes in business rules and the government's approach to tax collection is undermining efforts to streamline and speed up tax reforms, according to Moeenudin Khan, chairman of tax collection body the Central Board of Revenue (CBR).

'The restructuring is not taking place. CBR has sent several reports to the Finance Ministry which does not want a change. They think they will lose control. It is a bureaucratic thing,' he said in an interview. 'Unless we change the rules of business and our behaviour we cannot bring about a change.'

Khan, a banker by profession and appointed by Prime Minister Nawaz Sharif to restructure the tax system, says CBR is not being allowed to work freely and has to get the permission of the ministry for making even minor changes. 'We have to professionalise our tax assessment and source it out. The bureaucratic bottlenecks don't allow that. We should have a development and training programme for existing personnel by hiring professionals who can train them.'

He says CBR lacks technology, a proper management information system, and financial and accounting skills and the majority of its records are still on paper files. The government is losing around Rs 200,000 million ($3,990 million) a year to tax evaders - only 1.6 million people pay tax, he says. CBR has set itself a target of increasing the number to 2 million by the end of 1998.

'There is no data available on how many people are eligible to pay tax. Tax revenues account for only 12 per cent of gross domestic product [GDP]. In neighbouring India, the contribution is 20 per cent. We don't have the administrative machinery. CBR should be made an autonomous body rather than work as a division of the Finance Ministry,' says Khan.