There is no denying the fact that one of the key causes of privatization is to bicker alongside ritual incompetence and sleaze ingrained in social and cultural life. And among different communal part venture like customs, tax and narcotics management of the developing countries have been accredited as one of the core sectors where inefficiency and sleaze may loom large. This is because in tax administration ' low performance standards combine with low salaries to make dishonesty almost inevitable'.
From the very beginning of privatizations in mounting countries, it was well-known that tax supervision desired to be reformed in order to ensure fiscal discipline. As Managua, a prominent economist puts the idea in the sense that the advent of NPM pledge to assimilate efficiency and responsibility together in public sector and a significant component of NPM reforms is to establish aggregate fiscal discipline by cutting outflow and tumbling the cost of management'. This is also illustrious in the watching of the World Bank that 'aggregate fiscal discipline aims at restoring macroeconomic stability and restructuring tax systems so that taxes are more efficient and less distortion of market forces'. It is from the urge to establish fiscal discipline that tax administrations of many budding countries have assuming 'Astringent Out' was a way of privatization. Some researchers consider that tax farming in ancient Rome was a way of privatizing the tax system to overcome the problems of bureaucratic tax enforcement. Marabou and Nugent seem to support privatizations of tax administration when they say that where taxes are likely to be difficult to collect, the advantage of tax farming or fixed rent methods of collecting the taxes may be substantial.
Tax experience in progress envisages that as early as 1750 BC in Mesopotamia where the country's assemblies of elders were passed on the task of tax anthology to local merchants and bankers. It envisages that, during the Christ period, the Romans prearranged tax farmers as a steadfast and conventional way of spawn revenue. It is evident that tax farming had a number of facial appearances that completed it useful over the technical mode of revenue generation. First, tax farming was a method whereby governments could generate revenue without the need for an elaborate administrative structure. It was a system to minimize the cost of collecting tax revenue by involving the private sector. Secondly, with tax farming, the concerning management was spared the need to monitor the tax collection performance. It was a system of agency with guarantees and monitoring devices already built in. Since it was effectively a fixed rent contract, the tax farmers tried hard to maximize revenue collection so that they could make a profit after recouping their investments. Third, tax farmers purchased contracts through open auction and government received the funds in advance, prior to actual collection of taxes. So, it may be implied of the resources available for public expenditure. Fourth, tax farming exploited generation of revenue. Tax farmers acquired contracts to collect revenue from agricultural income in a given area and for a particular period. Agricultural income was, however, highly unpredictable because of natural factors and cultivators` ever-changing choice of production plan. Tax farmers were influential people in the local community who could motivate the cultivators into choosing a production pattern that would enhance revenue generation. Ramirez Acuna, a famous economist supports the idea of contracting out some of the tax administration functions and observes that government may entrust some tasks to the private sector instead of directly discharging them, which may lead to higher efficiency and effectiveness of tax administration. According to Byrne 'tax administration has been caught up in the tide of privatization sweeping the world during the last decade... the private sector should be able to carry out certain duties more efficiently than the public sector'. He also argues that 'there is immense dissatisfaction in many countries with the operation of the tax administration. Ineffective tax and customs administration causes upward pressure on rates to make up for lost revenue. Corruption and inefficiency in the tax and custom administration also causes the citizens to lose confidence in their government' Byrne goes on to say that 'customs is after all the most corrupt government institution... the Pre-shipment Inspection companies are less subject to corruption because they have their international reputation to protect and because their fee is based on value, which discourages under valuing of goods'.
Suffice it to say that Hood furthermore emphasized that 'there are three options when faced with tax enforcement problems. Firstly, leave it well alone; secondly make sure rigorous enforcement with higher penalties for non-compliance; and thirdly, revolutionize the enforcement structure through privatization of revenue collection functions'. The concept of contracting out as a method of privatization has been introduced in tax administration in the form of the Transhipment Inspection system 'Pre-shipment Inspection services have been employed by some management to address problems associated with over invoicing and under invoicing of trade transactions, tariff problems, short fall in revenue collections from taxes, and the management of funds for, balance of payments support'.
The 1993 ratification of the World Trade Organizations Agreement on Pre-shipment Inspection gave shipment inspectors new legitimacy in international trade. Several arguments are found in favour of contracting out the customs administration. Low says that the purpose of PSI is to increase the efficiency of the customs administration by reducing evasion in two ways: first, through establishing better control over import-related transactions effected abroad: and second by eradicating evasion through corruption by the customs officials by replacing them in crucial areas like 'identification of commodity' and ' 'appraisal of assessable value'. The World Bank observes that Reshipment inspection offers benefits for customs authorities in importing countries. The IMF is also of the same opinion. It says 'in developing countries customs reform should give priority to the simplification and modernization of legislation and procedures. If local administration capacity is particularly weak the use of PSI service may be appropriate'. Jenkins also argues that that pre-shipment customs work is desirable from an efficiency standpoint, since customs formalities can be completed before the merchandise even arrives in the importing country. Indonesia and Peru experienced significant improvements in revenue collections, shortly after PSI schemes were introduced but government officials in those countries could not determine with precision how much was attributable to any particular aspect of the broad customs reform package.
In view of the above it is evident that required decisions have been developed in favour of the PSI system as a means of constricting out the customs administration. But Contracting out has its demerits. Developing countries need to carefully administer contracting out in order to achieve success. 'The PSI instrument is useless if the customs management does not use the information and shipments continue to pass customs after a bribe is paid. Another common flaw in PSI is using more than one-PSI Company. When the PSI companies must compete for business, an importer can play the PSI companies against each other. This drives valuation down and can accelerate corruption. This lesson should be applied to other privatization possibilities; private contractors should never be put in the position of competing with each other in such a way that government's interests are compromised. Low also says 'weak government or a corrupt principal, will frustrate technical solutions to fraud, rendering such services as PSI costly and pointless'. Kohl observes 'where cultures of efficiency are not well established, calls for efficiency and competitiveness do not buy broad political support'. Some critics also see using PSI agencies as an admission to failure on the part of the government to police and reform corrupt customs administration. While recognizing the corruption problem, critics also argue that, as a result of companies contracting with governments key members of Government have been reported to have struck personally lucrative deals with some PIS firms.
From the above criteria it is evident that the success and failure of the pre-shipment inspection system in the customs department of Bangladesh needs to be thoroughly examined in terms of a) attainment of success b) lessening of sleaze and c) decline of tax evasion. A pragmatic study to this end is proposed in order to examine the effects of such changes in the customs administration. But in Bangladesh privatization and contracting out are making very slow progress. The main factors responsible for the slow progress of privatization are:
a. Lack of political will.
b. Lack of wide-ranging privatization policy strategy and action plans.
c. Weak intentional planning.
d. Lack of a public awareness program
From the above explanation, it is clear that SWOT (Strength, opportunity and threat) and SMART (Specific, measurable, achievable, review and time-barred) analysis are important where a thorough research work needs to be carried out to reach a definitive goal. Anomalies over the economic growth cannot exist in any circumstances for which we should work hard with sincere devotion and plan of action virtually.
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