ISLAMABAD: The government has moved a summary to seek Prime Minister Shehbaz Sharif’s approval for the appointment of a Director General (DG) for the newly established Tax Policy Office (TPO) under the Ministry of Finance.
Top officials in the Finance Division confirmed to The News on Wednesday a summary includes names of Dr Najeeb Ahmed, who is currently serving as FBR’s Member Tax Policy in Inland Revenue, and Dr Ashfaque Ahmed, who has previously served in the IMF on different assignments.
The formulation of tax policy has been separated from the tax collection operations of the Federal Board of Revenue (FBR), and the TPO now rests with the Ministry of Finance to comply with an IMF condition under the $7 billion Extended Fund Facility (EFF).
Meanwhile, the IMF’s Executive Board is set to approve the completion of the second review and release the third tranche of the EFF and the first installment of the Resilience and Sustainability Facility (RSF), amounting to $1.2 billion, in early December 2025.
Islamabad has agreed to release the awaited Governance and Corruption Diagnostic (GCD) assessment report before the IMF’s Executive Board meeting as a prior action, but negotiations are currently under way to delete certain portions of the IMF report to which the Pakistani side has raised objections. The GCD assessment report comprises over 200 pages, and the Pakistani authorities want some points removed before its publication. Another point of contention is the Agriculture Income Tax (AIT), as Sindh is reluctant to begin its collection.
Pakistan and the IMF have also finalised contingency measures in case of a revenue shortfall exceeding FBR’s targets in the second quarter (Oct-Dec) of FY26, including enhancing the GST on the import of solar panels from 10 to 18 percent and increasing tax rates on fertiliser and pesticides. The proposal to enhance the withholding tax on the internet has been dropped.
The Finance Ministry has also appointed Ajaz Hussain as a Director in the TPO on a contract basis for two years. The ministry has appointed four directors from the FBR for the TPO and one director, Khalid Mahmood, from the Pakistan Institute of Development Economics (PIDE).
Earlier this year, the federal cabinet approved the establishment of the TPO at the Ministry of Finance to advance the government’s economic reform agenda. The TPO is mandated to support the analysis of tax policies and proposals through data modeling, revenue and economic forecasting, as well as the management of the country’s international tax treaties and obligations. The TPO would report to the minister for finance & revenue.
Pakistan has committed to the IMF that, recognising the current lack of standardisation in tax policy formulation, the authorities will develop a comprehensive framework for standardised ex-ante and ex-post evaluations of tax policy measures, thereby ensuring consistency and facilitating evidence-based policymaking.
Pakistan will take necessary actions to finalise data-sharing arrangements between the FBR and the TPO. Furthermore, recognising the importance of clear coordination between the TPO and the FBR’s International Centre of Tax Excellence (ICTE), Islamabad will establish a collaboration framework to minimise overlap between these two bodies.