Mohsin Siddiqui (Chief Reporter)

Prime Minister Anwaa rul Haq Kakar has granted approval for alternative administrative measures instead of endorsing the restructuring plan proposed for the Federal Board of Revenue (FBR). The decision comes in light of constitutional challenges associated with the establishment of a National Tax Authority (NTA) and uncertainties regarding the mandate of the proposed structure.

Not satisfied with the initial restructuring proposal, PM Kakar has directed the formation of a new committee, chaired by Dr. Shamshad Akhtar, to review the recommendations put forth by the task force led by Dr. Akhtar. The committee will include key figures such as Fawad Hasan Fawad, Federal Minister for Privatisation, and officials from the PM’s Office, National Database Registration Authority, and FBR.

The proposed restructuring plan aligns with some of the recommendations made by the 2015 Tax Reforms Commission, which remained unimplemented over the past seven years. The task force suggested the creation of an NTA with the authority to oversee both federal and provincial taxes, raising questions about the constitutional autonomy of provinces.

The newly established committee will scrutinize the task force’s proposals, including the establishment of a Tax Policy and Revenue Division to separate tax policy from administration. The proposal for an autonomous FBR under the Tax Administration Oversight Board also faces scrutiny.

The task force’s recommendation for a separate Customs Division under the Ministry of Finance, with an autonomous Federal Board of Customs, was not approved by PM Kakar. The proposed Customs Board, aiming at trade facilitation and border controls, will be re-evaluated by the new committee.

In response to concerns raised by the World Bank Functional Review and the need for tax collection reforms, PM Kakar has greenlit alternative administrative measures. The FBR will introduce new regulations for data sharing among government departments, and district tax offices will receive 30% of the existing FBR workforce to expand the tax base.

Additionally, PM Kakar has approved a plan to levy taxes on retailers, amounting to three times the rental value of business premises. The FBR will launch a mobile app, Tajir Dost, enabling retailers to calculate and pay taxes in 12 monthly installments, further aiding in the return filing process.