Page 33 - CMA Journal (July-August 2025)

Focus Section

But at the same time, these benefits
are conditional on political will and
data quality. Institutional capacity is
another prerequisite that needs to
be enhanced to achieve targeted
goals. A gradual movement towards
these reforms will lead to
sustainable and trustworthy public
finance management.

Questions may arise about what
steps should be taken and what
actions shall be performed to
achieve the objective. This can be
understood through some
real-world case studies leveraging
data analytics that transformed PFM.
3) Pakistan (FBR): In Pakistan, the Federal Board of
The relevant point is what specific steps should be Revenue (FBR) introduced a data integration and
undertaken, and what resources are required to achieve analytics system that connects with NADRA, banks,
this objective? This can be illustrated through the India property registries, and other relevant authorities.
GST implementation, where data analytics was leveraged The system cross-checks taxpayers’ declared returns
to strengthen GST compliance, as documented by the against lifestyle indicators to identify discrepancies.
World Bank in 2023.
Between 2022 and 2023, it enabled the detection of
Case studies: India, Rwanda, Pakistan thousands of non-filers and cases of under-declared
income. In addition to enhancing compliance, the
1) India (GST): In 2017, India implemented a unified system significantly reduced manual inspection
Goods and Services Tax (GST). However, gaps in time.
cross-verifying transactions made tax evasion a
significant challenge. To address this and curb fraud, Conclusion
the government adopted artificial intelligence and
data analytics. These systems enabled the matching Effective PFM is pivotal for economic growth and
of buyer and seller invoices, integration of data from sustainable development. However, it encompasses
various authorities, and identification of suspicious serious challenges that need to be tackled. Modern
transactions. The results were remarkable. In 2022, technologies and data analytics have the potential to
the Ministry of Finance detected tax evasion since transform this critical sector. In the future, these
inception amounting to USD 16 billion, while innovations are poised to reshape the social and
compliance rates improved substantially. economic landscape of developing countries like
Pakistan. While systemic rigidity and bureaucratic
2) Rwanda: Rwanda implemented a series of reforms to hurdles may delay progress temporarily, ultimately,
enhance its PFM and significantly improve the embracing contemporary tools and techniques is the
management and performance of government capital only viable path forward.
projects. Some of these main reforms are highlighted
below. In 2013, the World Bank funded Rwanda to The conclusion of the argument is that our bureaucracy,
implement UMUCYO, an e-procurement system that political leaders, institutions, educational system, human
was the first of its kind in Africa. Built on a web-based resource developers, donors, and policymakers must
portal, UMUCYO offers services such as advertisement, come to a clear understanding: all existing obstacles and
e-bidding, evaluation, contract management, and inefficiencies need to be addressed and transformed.
related functions. The system has significantly reduced Adopting data analytics and technology is the only viable
processing time, resource costs, and opportunities for path forward.
corruption. Rwanda also implemented an Integrated
Financial Management Information System and About the Author: The writer is a Fellow Member of ICMA with over
20 years of experience in financial management, ERP
expanded the Information and Communication
transformations, data analytics, and performance analysis. He is
Technology (ICT) platform in the 2018–2024 PFM currently serving as Manager Accounts Payable and ERP Financial
reforms to enhance skill development programs, Transformation at a Dubai government entity and as Chairman of the
compliance with international standards, and boost Research and Publications Committee of the UAE Branch Council.
resource mobilization.

ICMA’s Chartered Management Accountant, Jul-Aug 2025 31