On the FBR reform, the finance minister is unable to win over tax officers

ISLAMABAD: Caretaker Minister for Finance Dr. Shamshad Akhtar Friday made a last-ditch effort to persuade the officials of the Inland Revenue Service (IRS) and Customs group to support a restructuring proposal at the Federal Board of Revenue‘s headquarters, but the visit proved fruitless.

Only the overhaul plan’s creators consented to its execution during Akhtar’s lengthy visit to the FBR headquarters; she was unable to persuade the remaining IRS and Customs group officers to follow her lead.

How the suggested plan will assist increase the tax-to-GDP ratio was left unanswered. While raising the tax-to-GDP ratio is desired, no one is sure how to achieve it.

The minister allegedly said that the officers’ complaints would be addressed during the implementation phase and accused the media of starting a campaign against the reorganization plan. She made a suggestion that the summary would be sent to the cabinet for approval.

According to the sources, the FBR chairman clarified his stance and declared that no material had been leaked from the organization. He added that after all of the information was made public, the media criticized the SIFC meeting minutes for having leaked information.

The conference lasted for hours on Friday and was attended by chief commissioners, customs collectors, FBR members, and all other pertinent FBR heads.

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The conference went on for hours without any progress in reaching an agreement on the restructuring plan; just the Friday prayer was permitted.

In her suggested proposal, Caretaker Finance Minister Dr. Shamshad Akhtar demonstrated how a new Federal Board of Customs and Federal Board of Inland Revenue governance structure would be built, with DGs from respective cadres appointed as their heads.

The chairs of the respective Oversight Boards for the Customs and Inland Revenue Administrations shall be independent, distinguished experts.

Nominees from the public and private sectors shall be selected based on appropriate standards, possessing the requisite experience and integrity.

The strengthening of governance with accountability through oversight boards will be the main goal of the changes.

A new policy mandate will be reported to the Federal Policy Board upon its reconstruction under the finance minister’s secretary, the Revenue Division.

Under the Federal Policy Board, the Tax Policy Office will be established with HR having the necessary experience, including professionals in taxation and industry.

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This office will oversee the harmonization of asset valuation procedures and the legal and regulatory framework of taxation regimes, as well as encourage coordination between revenue and policy.

The suggested changes will be put into effect within the parameters of the FBR’s current resource allocation.

In order to maintain independence, the SBP governor directed that the Tax Policy Unit (TPU) would oversee the audit functions of FBIR and FBC.