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November 14, 2018

Government set to delegate finance ministry with tax policymaking task

Business

November 14, 2018

ISLAMABAD: The federal cabinet approved the revival of the Federal Board of Revenue’s (FBR) policy board that would give tax policymaking privilege to the finance ministry, officials said on Tuesday – a move that has always been resisted by the tax authorities.

FBR officials confirmed with The News that the federal cabinet in its last meeting presided over by the Prime Minister Imran Khan approved revival of the policy board.

Though the board came into being under the FBR Act amended in 2011, but it could not be implemented in its letter and spirit for the past many years.

“The policy board into FBR could not hold its single meeting in the last seven years

despite the fact that it was mandated under

the law to hold at least one meeting in every quarter of a financial year,” a senior official said.

The government intended to separate policy and operation into the FBR with the intention to put policy into jurisdiction of the ministry of finance.

But, there is stiff resistance within the FBR to the proposal and so it is yet to be seen how the government proceeds on the subject in weeks and months ahead.

Minister for Finance Asad Umar told The News last week that policy and operation would be separated into FBR and a summary to the effect would be tabled before the cabinet.

The Pakistan Tehreek-e-Insaaf-led government has made tall claims to bring reforms into FBR by broadening the narrow tax base and doubling the tax collection in short span.

But, the FBR has so far been facing shortfall in the range of Rs60 to 70 billion in achieving its revised target for the current fiscal year and there are projections that if something concrete is not done on immediate basis the revenue shortfall might touch to the tune of Rs200 billion for the whole fiscal year.

The government envisaged FBR tax collection target of Rs4.398 trillion for the current fiscal year.

The FBR officials said the policy board would be revived when the nomination from all the sides would be completed. It might take few weeks for re-constitution of the policy board, they added.

The 11-member policy board will comprise minister for finance as chairman, federal ministers for commerce, industries, textile, and privatisation, chairmen senate standing committee on finance, National Assembly Standing Committee on Finance and Revenue and FBR, one member from the senate nominated by the Chairman Senate, one member from National Assembly nominated by Speaker National Assembly and such other members as Prime Minister will nominate from private and public sectors on honorary basis.

FBR chairman will act as secretary of the policy board, which will hold a meeting at least once in each quarter of a fiscal year.

“The nominated members other than ex-officio members shall be subject to ratification by the Standing Committee on Finance and Revenue of the Senate and National Assembly,” a statement said.

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