Islamabad, Feb 14: In a significant restructuring of Pakistan’s tax administration, the federal government has transferred the tax policy-making authority from the Federal Board of Revenue (FBR) to a newly established Tax Policy Office within the Ministry of Finance. This move is aimed at fulfilling one of the conditions set by the International Monetary Fund (IMF) for continued financial support.
A formal notification has been issued confirming the creation of the new office, which will now be responsible for the formulation of all tax policies, independent of the FBR. The Tax Policy Office will report directly to the Federal Minister of Finance and Revenue, marking a clear distinction between policy formulation and tax collection, which will now be solely handled by the FBR.
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The newly established office will focus on formulating a government-centered reform agenda, ensuring that tax policies are developed with comprehensive data analysis, including revenue assessments, economic forecasting, and data modeling. This approach is intended to promote informed decision-making within the tax system.
As part of the IMF’s requirements, the restructuring is aimed at increasing transparency and efficiency in Pakistan’s taxation system. The Tax Policy Office will specifically be tasked with preparing reports on income tax, sales tax, and federal excise duty (FED) policies, which will be presented to the finance minister. Meanwhile, the FBR’s role will be confined to the implementation of tax measures designed to boost national revenue.
In addition to policy development, the government plans to strengthen tax enforcement, closing loopholes, and combating tax fraud as part of the ongoing efforts to enhance the country’s fiscal health. The changes are expected to streamline the tax administration process, increase accountability, and ultimately improve revenue generation for Pakistan.
