Company Raj to Debt Raj—IV Revenuecracy: from Company Collector to Pakistan’s fiscal state

Part II traced how the Diwani converted Company power into fiscal sovereignty. Part III moved from territorial rule to conditionality and called recurrent dependence “fiscal sovereignty capture”. Between the two lies the domestic machinery that converts a revenue demand into collection. The East India Company could not rule Bengal merely by winning battles. Revenue required records, assessment, collection and local intermediaries. The Collector became central to turning political power into a fiscal system.

The genealogy requires care. As we argued recently in The Friday Times, the Company Collector cannot simply be equated with the later Indian Civil Service (ICS). Competitive recruitment, training, language proficiency and field administration transformed the institution. 

The ICS eventually performed substantial functions in public works, irrigation, famine relief, health and district administration.

Pakistan inherited this administrative tradition and produced its own mutation—the Central Superior Service (CSS) of Pakistan. District Management Group (DMG), now Pakistan Administrative Service (PAS) retained extraordinary coordinating and gatekeeping power while specialist institutions remained subordinate. Tariq Mahmood Awan’s The Bureaucratic Coup carries this critique further by examining how files, information, appointments and access to decision-making concentrate administrative power.

The connection with our argument lies in a term coined by the late economist and popular public intellectual, Dr. Pervez Tahir: “revenuecracy”. He used it for an entrenched revenue establishment that produced neither an equitable tax system nor efficient collection. Revenuecracy is more than bureaucracy. It is a fiscal order in which extraction from what is administratively accessible displaces the harder task of building a productive, equitable and democratically accountable tax system.

A quarter century ago, we wrote “IMF, the New East India Company” in Dawn Business & Economic Review (May 21–27, 2001). The language was deliberately provocative. The article documented how the then Central Board of Revenue (CBR) was required to prepare lists of major arrears, pursue specified recovery cases, undertake predetermined numbers of audits and report collection performance under an International Monetary Fund (IMF)-supported programme.

The comparison with Company rule was imperfect. Its underlying question was not: who determines the revenue demand, and through whose machinery is it enforced? Our later critique of the World Bank-funded Tax Administration Reform Project (TARP) raised another aspect of the same problem. Foreign borrowing financed foreign consultants to redesign Pakistan’s tax administration while Parliament remained peripheral. Genuine tax reform, we argued, had to emerge through democratic debate, rational policy and parliamentary oversight rather than bureaucratic implementation of donor-designed projects.

The IMF does not appoint Pakistan’s Collectors. It does not issue assessment orders or collect taxes. Pakistan negotiates IMF programmes through its government. Parliament enacts Finance Acts. Pakistani officials administer them. This distinction is fundamental.

The contemporary evidence nevertheless deserves attention. The IMF’s May 2026 Third Review contains a floor for net tax revenues collected by the Federal Board of Revenue (FBR), alongside targets for provincial revenue authorities and income tax from retailers. The FBR revenue floor is to become a quantitative performance criterion from December 2026. The programme also monitors tax refund arrears. Its structural agenda includes audits, digital invoicing, production monitoring and implementation of the FBR transformation plan. Many objectives are legitimate. Pakistan needs documentation, fair taxation of undertaxed sectors, scrutiny of tax expenditures and timely refunds. Digitalisation can reduce evasion.

The problem begins when the revenue target substitutes for tax policy. Pakistan’s revenue machinery repeatedly finds the easiest taxpayers rather than the correct taxpayers. Withholding taxes, indirect taxation, advance and minimum taxes, petroleum levies and collection through utilities and banking transactions make documented economic activity convenient to tax. Political influence makes other incomes and privileges harder to reach. Revenuecracy thus becomes the domestic transmission mechanism of fiscal sovereignty capture.

The Company Collector was answerable upward. His central responsibility was revenue. The modern Pakistani administrator operates in a constitutionally different state, but target-driven administration can reproduce the same direction of accountability: upwards towards the revenue requirement rather than outwards towards citizens possessing enforceable rights.

Our exchange in The Friday Times with Shahid Sattar and Nadeem Ul Haque sharpened this distinction. Institutional inheritance is not destiny. Pakistan made its own choices after independence. The relevant question is whether the administrative mindset still governs people from above rather than making public authority accountable from below.

The IMF programme adds another layer. The chain today is not Diwani–Collector–Company treasury. It is external financing requirement–negotiated conditionality–Ministry of Finance–FBR and provincial revenue administrations–taxpayer. There is no colonial sovereign in this chain. There is, however, measurable external leverage. That leverage operates within an institution whose voting power is unequal. 

The IMF’s current data give the United States 16.49 percent of total voting power, Japan 6.14 percent and China 6.08 percent. Pakistan participates as a sovereign member, but sovereign membership does not mean equal institutional power. This asymmetry should neither be exaggerated nor ignored.

Raza Rabbani called the IMF the “new East India Company” in 2019. The phrase captures an anxiety about sovereignty, but literal equivalence obscures more than it explains. The EIC conquered territory. The IMF conditions financing. The bridge between them is domestic institutional dependence.

India provides an instructive contrast. It approached the IMF during its severe 1991 balance-of-payments crisis and undertook major reforms. Whatever disagreements remain about their distributional consequences, emergency financing did not become a permanent framework for running its fiscal affairs. The important difference was not that India escaped conditionality. It escaped recurrent programme dependence.

Pakistan did not. This returns responsibility to where it belongs. Our 2001 article itself ended by acknowledging Pakistan’s own failures: tax evasion, collusion within the tax machinery and privileges enjoyed by ruling groups. Blaming the IMF cannot absolve those who repeatedly create the need to approach it.

A revenue bureaucracy can serve an elected constitutional state. It can also transmit externally negotiated fiscal targets to those easiest to tax while entrenched privileges survive. The creditor then acquires leverage, the government can acquire an alibi, and the documented economy bears adjustment.

The decisive reform is not simply to resist the IMF. It is to make recurrent IMF dependence unnecessary. That requires replacing revenuecracy with fiscal democracy: equitable taxation, parliamentary ownership of tax policy, independent tax justice, empowered local governments, professional specialist institutions and expenditure accountable to citizens.

The Company needed Collectors and local intermediaries because foreign power could not extract Bengal’s surplus without indigenous administrative machinery. The IMF needs no gumashtas in the colonial sense. Pakistan supplies its own administrative machinery and voluntarily enters programme commitments.

Have we replaced colonial revenue extraction with democratic fiscal government—or merely nationalised the Collector and internationalised the revenue target?

References

1. Philip J. Stern, The Company-State: Corporate Sovereignty and the Early Modern Foundations of the British Empire in India, Oxford University Press, 2011.
2. Huzaima Bukhari & Dr. Ikramul Haq, “The Collector Is Not The Whole Story: What The ICS Built And Pakistan’s DMG Lost”, Friday Times, September 6, 2026.
3. Shahid Sattar & Nadeem Ul Haque, “The Collector Changed His Name, Not His Mindset”, Friday Times, September 10, 2026.
4. Tariq Mahmood Awan, The Bureaucratic Coup: How Bureaucracy Betrayed the Nation, Republic Policy Think Tank, 2026.
5. Dr Pervez Tahir, “Giving FBR a decent burial”, The Express Tribune, November 8, 2019.
6. Dr. Ikramul Haq, “IMF, the New East India Company”, Dawn Business & Economic Review, May 21–27, 2001.
7. Huzaima Bukhari & Dr. Ikramul Haq, “Tax Reforms: Why Expensive Foreign Consultants?”, Business Recorder, January 10–11, 2007.
8. Huzaima Bukhari & Dr. Ikramul Haq, “Tax babus, foreign masters and reforms”, Business Recorder, April 16, 2010.
9. International Monetary Fund, Pakistan: Third Review Under the Extended Arrangement Under the Extended Fund Facility and Second Review Under the Resilience and Sustainability Facility Arrangement, IMF Country Report No. 26/101, May 2026.
10. International Monetary Fund, “Executive Directors and Voting Power”, updated September 18, 2026.
11. Akshobh Giridharadas, “The IMF’s Role in Shaping India’s Current Economic Outlook”, Stimson Center/South Asian Voices, May 1, 2023.
12. Raza Rabbani terms “IMF new East India Company”, The News International, May 6, 2019.

[To be continued]

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Dr. Ikramul Haq, Advocate Supreme Court, writer, literary critic, Adjunct Faculty at Lahore University of Management Sciences (LUMS), member Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE), holds an LLD in tax laws. He was full-time journalist from 1979 to 1984 with Viewpoint and Dawn. He also served Civil Services of Pakistan from 1984 to 1996.