FBR to send restructuring summary to cabinet division this week

• FBR chairman seeks ECP endorsement at implementation stage. 
• Chairman agreed to proposal under pressure, say sources. 
• Federal Policy Board will work under finance minister.

ISLAMABAD: The caretaker government is moving forward with the restructuring plans of the Federal Board of Revenue (FBR) with the chairman ready to send the summary to the cabinet for consideration this week, The News reported Monday.

The chairman of the country’s revenue machinery, Amjad Zubair Tiwana, will also seek the Election Commission of Pakistan’s endorsement at the implementation stage.

The military establishment, especially the officer who is looking after the Special Investment Facilitation Council (SIFC), played a critical role in narrowing down the differences and convincing the FBR chairman to sign the summary and send it to the cabinet division. 

The message was loud and clear, so the incumbent FBR chairman had two options — either to send the summary or go home. The summary will now be forwarded to the cabinet this week after Tiwana's signature. 

The FBR chairman did not respond to The News' request for comments on the matter. 

However, sources said FBR Chairman Tiwana had entered into an awkward position where he had succumbed to the pressures and had to agree to the proposal floated by the Caretaker Minister for Finance Dr Shamshad Akhtar. The military’s top brass did not ask any side to accept their viewpoint but they asked them to find out the middle ground acceptable to all sides.

“Chances are that both the IRS and Customs officers may approach the judiciary once the federal cabinet grants its nod,” said one official who added that they were confident that they would be taken into confidence but the top guns preferred to go ahead.

One top tax expert, while referring to the official minutes of the SIFC meeting, stated that he had read the minutes and thought everything stands decided.

Both the oversight boards will be headed by chairmen from the private sector. The two boards will have both private and public members and the public members will probably also not be from the FBR except the DG of IR and Customs.

He said the Federal Policy Board will work under the finance minister and will not have anyone from the IR or Customs. Tiwana, who is also secretary of revenue division, will be reporting to the Federal Policy Board. 

The tax policy office, which will be probably dominated by private professionals, will also be reporting to the Federal Policy Board. The two service groups will also be headed just by DGs, and there doesn’t seem to be any scope for members working under them.

“Everything seems to have been decided, so what is Tiwana sahib now resisting? I think the news of his not initiating the summary for the cabinet is being spread by him to save face and appear as a hero trying to struggle for the interest of the IRS. The FBR chairman already has conceded to everything as is obvious from the minutes,” the expert added.

The summary is going to propose that a new governance structure for the FBR will be established through separate Federal Board of Customs and Federal Board of Inland Revenue and appointment of DGs from respective cadres as their heads.

The separate Oversight Boards for Customs and Inland Revenue Administrations are to be chaired by independent high-calibre professionals, and members of the board will include public and private sector representation nominated through proper criteria and right expertise and integrity. 

The focus of reforms will be on strengthening governance with accountability through oversight boards. The reconstitution of the Federal Policy Board under the minister for finance with Tiwana will report to the Federal Policy Board with a new policy mandate. 

The Tax Policy Office will be constituted with HR having the right expertise, including taxation and industry professionals under the Federal Policy Board, which will look after the harmonisation of assets valuation modalities and legal and regulatory framework of taxation regimes and promote revenue and policy coordination. 

The proposed reforms will be implemented within the existing allocation of resources of the FBR. The governor SBP advised that the audit function of FBC and FBIR would be placed under the Tax Policy Unit to ensure independence.