KARACHI: Federal Cabinet chaired by Prime Minister Imran Khan has approved the proposal regarding separation of tax policy from revenue administration. A committee has also been constituted to workout technicalities and modalities for a separate tax policy division.
The cabinet also decided that no government official would be sacked from service.
The FBR will remain within the ambit of existing Revenue Division with its role to be confined to tax administration and collection.
As per the proposed plan, the policy division will be stationed at FBR initially with the senior most tax officers posted here. The tax policy division will fall under the Finance Division. “We will introduce separate rules for posting, transfers, administration and reporting line of all tax officers posted in tax policy,” the official said, adding that it will be totally independent and have no connection with the FBR.
The government has decided to create a separate tax policy division, constituting a new board, as part of the ongoing reforms in the Federal Board of Revenue (FBR). In the last cabinet meeting led by Prime Minister Imran Khan, it was decided to take away policy formation powers from the FBR.
It may be mentioned here that in September this year, Pakistan Business Council (PBC) has urged the government to separate tax policymaking from tax administration and collection, which are currently the responsibility of the Federal Board of Revenue (FBR).
The PBC had urged the government to separate tax policymaking from tax administration and collection, which has in the recent past resulted in short-term knee-jerk deficit management measures that undermine long-term sustainability of businesses.
“It negatively impacts business confidence, thereby potentially slowing the national tax revenue stream. We recommend that tax policy should promote long-term health of business and be entrusted to a body which should have private-sector representation and be accountable to parliament,” Ehsan Malik of PBC had said.
According to the PBC, the dual task of tax policymaking and tax collection has led to issuance of notices, demand for tax payment in advance and harassment of taxpayers