FBR’s policy, operation separated

ISLAMABAD: The PTI-led government has approved to separate FBR’s policy from its operation and a formal summary to this effect is approved by the federal cabinet on Thursday.

Prime Minister Imran Khan also chaired meeting for discussing FBR reforms here at the PM Chamber at Parliament House on Thursday in which the premier directed the Board to bring transparency and improve tax compliance in the country as Pakistan desperately requires resources to meet basic requirement of the people of the country.

While talking to The News here on Thursday, Minister for Finance Asad Umar said that the government moved ahead with major reforms in the tax collection machinery and summary to this effect for separating policy from the operation moved before the cabinet for getting final approval.

Official sources said that it was yet to see whether the policy wing of the FBR would remain under the jurisdiction of the Ministry of Finance or it would continue its position within the FBR as policy should be ideally located in the Ministry of Finance because tax is part of overall fiscal policy of the government and its formulation should be devised under overall umbrella of the government keeping in view all pros and cons of macroeconomic framework.

The Policy Board of FBR exists under the law and it might be revived. There is resistance within the FBR bureaucracy which wants to remain within the FBR building so they could consider themselves as part of movers and shakers of the tax machinery. If the policy wing is put in the jurisdiction of the Finance Ministry, the FBR official would not be happy ultimately.

When the minister was asked about FBR’s revenue shortfall in the range of Rs60 billion to Rs70 billion so far, Asad Umar said that the tax machinery was facing difficulty for achieving its target but the reform would be introduced to broaden the narrowed tax base that would help netting the desired tax collection target. When asked if the visiting IMF mission might force the government to slap additional taxes in the current fiscal to bridge the shortfall, he said that the IMF did not raise this issue so far but it might surface in policy level discussion which were expected to be held with the visiting Fund mission next week.

To another question about rising budget deficit in the first quarter (July-Sept) period of the current fiscal year that was closing near to 1.5 percent of GDP, the minister said that it was expected because of the last budget unveiled by the PML-N-led regime under which the budget deficit was supposed to surpass 7.1 percent of GDP so increased budget deficit was the expected outcome of the last regime policies but after presenting the revised budgetary estimates now the budget deficit would be curtailed in remaining period of the current fiscal year.

When asked about exact financial package size from friendly countries, he said that negotiations were underway with China and UAE after securing $6 billion from Saudi Arabia and our position on this account would become clearer by end of the ongoing month. “Yes, we have made request to UAE for providing us financial package,” he said but refused to share exact details of request made to UAE by the PTI regime.