ISLAMABAD: The Federal Board of Revenue’s (FBR) proposed reorganization has drawn criticism from tax officials due to its unclear structure, unclear implementation plan, and lack of ownership by pertinent ministries.
According to a story in The News on Thursday, the officers have threatened to file a lawsuit if the interim finance minister rushes through the federal cabinet to approve the summary.
They also expressed to the government their concerns about the possible threats to the financial stability of the federation in the event that more tax and administrative division takes place without a carefully considered plan.
The current FBR institutions are regarded as well-thought-out, having been created in the late 1990s and early 2000s with technical support from IFIs like the World Bank. The changes made during that time led to the current tax collection system.
When Dr. Shamshad Akhtar, the interim finance minister, visited the FBR’s headquarters, officials voiced their reservations with the proposed reorganization plan. But their worries went unanswered, which made them even more irritated.
The reorganization plan’s detractors contend that it lacks a defined strategy and omits important information regarding the expansion of administrative boards and policy at the highest levels. Certain parts of the tax system that are in charge of collecting and charging taxes are unclear.
A Federal Board of Customs, a Federal Board of Inland Revenue, a Federal Tax Policy Board, and an Oversight Board will all exist under the restructuring plan. Nonetheless, the FBR’s current structure will remain in place in the absence of explicit implementation guidelines.
When there will be two distinct boards for customs and the inland revenue service (IRS), questions are raised regarding how to collect inland revenue taxes practically.
In addition, uncertainties surround the FBR’s foreign responsibilities and the manner in which they will be fulfilled.
The caretaker government, cognizant of its limited tenure, underscores the necessity for restructuring in order to tackle the low GDP-to-tax ratio and guarantee taxpayer convenience.
On how the suggested plan will include industries like real estate, retail, and agriculture in the restructuring, there are, however, no clear answers.
Opponents contend that the restructuring proposal could further split the revenue service and cause disruptions in the income stream, which would hinder the company’s ability to meet its revenue goals for the current fiscal year.
Young and mid-career officers worry that their career prospects are in jeopardy, and concerns have been raised over the influence on their careers.
The Tax Administration finds the change from a technical board to a corporate board structure intolerable since revenue boards either internationally or locally view it as foreign.
