Govt nods to tax policy unit under finance division’s control

ISLAMABAD: The government on Thursday approved establishment of a tax policy unit under the administrative control of the finance division despite an opposition by the Federal Board of Revenue (FBR).

The FBR wanted to keep the policy unit under the domain of the revenue division but the government did not accommodate its wish. On the advice of multilateral lenders, the government decided to move ahead to separate policy from enforcement matters, according to people familiar with the matter.

The decision was taken during the 5th meeting of the FBR Policy Board. Minister for Finance Hafeez Shaikh directed the FBR to expedite the process of releasing income tax refunds less than Rs50 million to uphold the committment of the government.

Minister for Privatization Mohammad Mian Soomro, Adviser to the Prime Minister on Commerce Razak Dawood, Adviser to the PM on Institutional Reforms and Austerity Ishrat Hussain, Special Assistant to the Prime Minister on Revenue Waqar Masood, FBR Chairman, and senior officials participated in the meeting.

FBR made a presentation regarding establishment of tax policy unit in accordance with the decision of the Cabinet dated 29 November, 2018. Members of the Policy Board gave a valuable input highlighting the advantages of keeping tax policy function independent of administrative function.

After due deliberation, the finance minister accorded approval for the establishment of ‘tax policy unit’ under the administrative control of the finance division. The new setup will include members from FBR and also engage fiscal and economic experts from academia, think tanks and private sector to present holistic proposals for mobilising revenue generation with greater autonomy. Tax Policy Unit would work out policy recommendations for domestic tax collection on the lines of the National Tariff Commission which operates under the ministry of commerce.

The minister directed to disseminate relevant information about the working of complaint registration mechanism and ensure the contact details are readily available for public consumption.

FBR’s technical committee apprised the Policy Board about the measures taken to identify anomalies and simplify the taxation system for better understanding of the business community. FBR requested to include senior representatives from the ministry of commerce and ministry of industries and production for better coordination and effective policy making in this regard.

Complaint Oversight Committee Chairman briefed the Policy Board about the working of a newly developed complaint portal which is currently running on trial basis. The complaint resolution system is designed to facilitate businessmen, traders, small and medium enterprises and large tax payers. All complaints can be filed at one place. Standard operating procedures for complaint resolution and oversight by Complaint Oversight Committee are finalised and system would be formally launched soon.