Islamabad, January 30, 2024 – The Federal Cabinet, in a meeting on Tuesday, gave the green light to a comprehensive restructuring of the Federal Board of Revenue (FBR).
The decision, driven by recommendations from the Revenue Division, is set to usher in a new era of governance in revenue collection and taxation policies.
Chaired by Caretaker Prime Minister Anwaar-ul-Haq Kakar, the Federal Cabinet’s approval signals a significant shift in the organizational structure of the FBR. One of the key reforms approved is the establishment of a Federal Tax Policy Board within the Revenue Division. This Board will play a pivotal role in formulating the national tax policy, setting revenue targets, and maintaining effective communication with stakeholders.
The Federal Finance Minister will lead the Federal Tax Policy Board as its chairman, with membership comprising Federal Secretaries for Finance, Revenue, and Trade, along with the Chairman of the National Database and Registration Authority (NADRA) and experts from relevant departments. This composition ensures a holistic approach to tax policy formulation, taking into account the expertise from various domains crucial to effective fiscal governance.
Another notable development is the separation of the Customs and Inland Revenue departments. Both departments will now be led by Directors General of the respective cadres. The Directors General will have full authority over institutional, economic, and operational matters within their departments. This strategic move aims to streamline decision-making processes and empower leaders to implement internationally accepted measures for digitization, complaint resolution, and transparency.
To provide effective oversight, separate oversight boards for Inland Revenue and Customs will be established. This bifurcation aims to tailor the governance structures to the specific needs and challenges faced by each department, fostering targeted and efficient solutions.
During the meeting, Prime Minister Anwaar-ul-Haq Kakar emphasized the importance of ensuring a smooth transition and avoiding any clash of interests during the appointment of experts to key positions. The directive underscores the government’s commitment to maintaining the integrity and impartiality of the restructuring process.
In a forward-looking approach, the Prime Minister also instructed the relevant authorities to submit a draft summary of the approved reforms to the upcoming elected parliament for necessary legislation. This step ensures that the restructuring process remains transparent, consultative, and aligned with democratic principles.
The approved restructuring of the Federal Board of Revenue reflects the government’s commitment to modernize and optimize the tax administration system, fostering an environment conducive to economic growth and fair fiscal practices. As the proposed changes take effect, stakeholders are hopeful that the revamped FBR will become a model for efficient tax governance, aligning with global best practices.
