ISLAMABAD: The interim administration is moving quickly to reorganize the nation’s revenue system. In the coming two weeks, an ordinance intended to improve the stagnant tax-to-GDP ratio and lessen dependency on human judgment is anticipated to be enacted.
Despite fierce internal opposition from stalwart supporters, informed sources stated that the caretaker government and other important stakeholders—aside from the revenue staff—were committed to reorganizing and restructuring the federal revenue machinery and wanted the plan in place well in advance of the general elections set for February 8.
If acting Finance Minister Dr. Shamshad Akhtar can persuade the federal cabinet and the Special Investment Facilitation Council (SIFC) of the value of the proposed independent structure and the caliber of oversight policy board members in guaranteeing a fair, efficient, and progressive tax system, an ordinance reorganizing the Federal Board of Revenue (FBR) may be issued this month.
The restructuring plan has already received preliminary approval from the SIFC. According to an official, the federal cabinet might consider a formal and updated summary before the weekend, outlining the reasons why the caretakers felt compelled to advocate for the FBR’s reorganization. However, the tax bureaucracy and their political allies, who have historically opposed such reforms, will vehemently oppose this move.
The caretakers, especially Dr. Akhtar, blame the antiquated organizational structure of the FBR for the nation’s dismal tax performance.
Their approach seeks to combat corruption and underperformance by doing away with inefficiencies and introducing accountability mechanisms. One way to do this is by designating non-FBR individuals to oversight boards, which will interfere with the conflict of interest that currently prevents the best possible tax collection and administration.
