Islamabad, February 14, 2025 – The Finance Ministry has issued a notification announcing the establishment of a dedicated Tax Policy Office, leaving the Federal Board of Revenue (FBR) to focus exclusively on revenue collection.
According to the notification issued by the Finance Ministry, the federal cabinet has approved the creation of the Tax Policy Office within the ministry to support the government’s broader economic reform agenda. This newly formed office will play a critical role in the development, evaluation, and implementation of tax policies.
The Tax Policy Office will provide analytical support by conducting in-depth assessments of tax policies and proposals. It will utilize advanced data modeling techniques, revenue forecasting tools, and economic impact analyses to guide policy decisions. Additionally, the office will oversee Pakistan’s international tax treaties and obligations, ensuring compliance with global standards.
The notification states that the Tax Policy Office will report directly to the Minister for Finance and Revenue. The staffing of the Tax Policy Office, as sanctioned by the federal cabinet, will be carried out with the joint approval of the Establishment Division and the Finance Division, in accordance with government regulations.
“The responsibilities and organizational structure of the Tax Policy Office may be revised as necessary to enhance its operational efficiency, subject to the federal cabinet’s approval,” the notification added.
For decades, the FBR has been responsible for both tax policy formulation and operational execution. This significant policy shift aims to relieve the FBR of its dual responsibilities, enabling it to focus entirely on tax collection efforts. The decision was prompted by concerns over the stagnant tax-to-GDP ratio despite numerous reform initiatives.
Tax experts have largely welcomed the government’s bold move, recognizing the potential for improved efficiency and effectiveness in both policy formulation and revenue collection. They believe that the Tax Policy Office’s establishment will bring greater clarity and direction to the country’s tax strategy, while allowing the FBR to concentrate on optimizing tax collection mechanisms.
With the Tax Policy Office now operational, the government anticipates better-informed tax policies and a more streamlined, performance-driven revenue collection process.