1/31/24, 10:21 AM Cabinet, ECP at odds over FBR overhaul

EXPRESS NEWS URDU E-PAPER ENGLISH E-PAPER SINDHI E-PAPER CRICKET PAKISTAN EXPRESS LIVE CAMPUS GURU EXPRESS ENTERTAINMENT FOOD TRIBUNE

  

TODAY'S PAPER | JANUARY 31, 2024 | ADVERTISE

HOME LATEST PAKISTAN BUSINESS WORLD OPINION SCI-TECH LIFE & STYLE T-MAGAZINE T.EDIT SPORTS BLOGS VIDEOS SLIDESHOW ARCHIVE OTHER PODCAST WEBINAR

Cabinet, ECP at odds over FBR overhaul Join Us

Commission says move beyond interim set-up’s mandate
  
Shahbaz Rana January 31, 2024  

ISLAMABAD: In an anticlimax to the Federal Board of Revenue

(FBR) restructuring saga, the interim federal cabinet on Tuesday
approved the overhauling of the tax machinery but minutes later
was stopped by the Election Commission of Pakistan (ECP), which
found the move in violation of the polls law.

Headed by caretaker Prime Minister Anwaarul Haq Kakar, the interim cabinet
approved the summary for the restructuring of the FBR but decided that it
should be carried out by the next elected government. Some cabinet ministers
opposed the restructuring on the grounds that it was not the mandate of the
interim setup and also because the FBR was performing well.

The approved restructuring was contrary to the manifesto of the PML-N that
has promised to separate the customs department from the FBR and place it
under a ‘to-be-created’ economy ministry.

However, according to the interim cabinet’s decision, the FBR will cease to
exist and two new organisations -- the Federal Customs Board and Federal
Inland Revenue (IR) Board – will be created. In addition, the newly formed
bodies will be placed under the Revenue Division.

“The FBR’s restructuring has been approved by the [interim] cabinet. Now it
will be up to the next parliament to make the requisite changes to give effect to
its restructuring,” interim PM Kakar told The Express Tribune.

To a question, the interim premier said the caretaker government had made
its intent clear to reform the FBR and now it would be up to the elected
government whether it wanted to carry it forward or not.

https://tribune.com.pk/story/2454981/cabinet-ecp-at-odds-over-fbr-overhaul 1/8
1/31/24, 10:21 AM Cabinet, ECP at odds over FBR overhaul

To another query, Kakar replied that the FBR’s performance had improved in
recent months because of the caretaker government’s focus on it.

The FBR surpassed its first half revenue collection target by a wide margin,
helping avoid the introduction of a mini-budget.
However, the moment the news about the caretaker cabinet’s approval for the
FBR’s restructuring came out, the ECP dispatched a letter to the secretary to
the interim premier, directing him to stop any overhauling exercise.

“I have been directed to convey that the caretaker Prime Minister of Pakistan
may be advised not to go for major reforms in FBR and keep it pending for the
consideration by the new to-be-elected government by virtue of the General
Elections 2024,” the ECP letter read.

The commission further wrote that the “planned overhauling of FBR attracts
the statutory provisions (of the Elections Act, 2017) and the matter falls under
major policy decision, which is the prerogative of the elected government”.

According to Section 230 (2a) of the Elections Act, the caretaker government
“shall not take major policy decisions except on urgent matters”.

Similarly, Section 230 (2b) of the Act states that interim set-up “shall not take
any decision or make a policy that may have effect or preempt the exercise of
authority by the future elected government”.

Interim Finance Minister Dr Shamshad Akhtar had initiated the FBR

restructuring exercise, which many cabinet members opposed on the grounds
that the interim set-up lacked the mandate to do so. They also pointed out that
the plan did not address the issues of corruption as well low tax and filer bases
in the country.

Even the caretaker law minister told the cabinet that the interim government
did not have the legal mandate to legislate on the FBR restructuring.

The interim finance Minister wanted to promulgate a presidential ordinance

to give effect to these legal changes.

Last week, the interim cabinet had decided that in view of its constitutional
and legal mandate, the caretaker set-up “would only carry out the groundwork
for the FBR’s structural reforms” keeping in view the public interest, but
legislation to bring these reforms into effect would be left to the new elected
government.

The interim cabinet’s decision to split the FBR into two new organisations and
three new boards is unlikely to be implemented.

The cabinet was informed that the scope of restructuring was wide-ranging.

Its implementation will require amendments to various tax statutes and

related laws, enactment of legislation for the two new organisations, and
changes in the respective rules as well as the Rules of Business 1973.

The cabinet was further told that changes would be required in connection
with the budget and expenditure allocations for the two organisations,
establishment of new administrations, and division of the existing assets
between them.

“The legal and administrative formalities would be completed as soon as

practicable,” read a sentence in the cabinet summary that did not elaborate
much.

According to the interim cabinet’s decision, a new Federal Policy Board will be
reconstituted chaired by the finance minister.

https://tribune.com.pk/story/2454981/cabinet-ecp-at-odds-over-fbr-overhaul 2/8
1/31/24, 10:21 AM Cabinet, ECP at odds over FBR overhaul

The Tax Policy Board with the support of the Revenue Division secretary will
have a new mandate. It will play an instrumental role in the formulation of the
tax policy, coordinating an effective litigation defence system, assignment of
revenue targets, and coordinating all strategic issues among the stakeholders.

The cabinet decided that the customs and IR organisations will be separated,
with each headed by a director general to be appointed by the federal
government from their respective service cadres for a fixed tenure.

The two establishments will be the attached departments of the Revenue

Division. The DGs will have administrative, financial and operational
autonomy including budgeting as well as posting and transfers for their
respective establishments.

The cabinet did not approve that the Revenue Division secretary will be
appointed from the service cadre of customs or the IRS. Rather, they can be
appointed from any service cadre.

Both the Custom and IR oversight boards will be chaired by the finance
minister. This is contrary to the recommendation of the cabinet committee of
appointing the finance and customs secretaries as the heads of these boards.

The interim prime minister decided that tax consultants would not be
appointed as members of the oversight boards.
Both the oversight boards will include finance, revenue and commerce
secretaries; the National Database and Registration Authority (NADRA)
chairman, and domain experts.

The two board members will be rigorously subjected to predefined fit and
proper criteria and have domain knowledge required on tax policy expertise
with no conflict of interest. They will be selected based on their integrity.

Both the customs and IR DGs will act as the secretaries to their respective
boards.

The customs organisation will act as a withholding agent for the

administration of IR taxes at the import stage for smooth functioning and
continuity of operations.

All matters related to international taxes; valuation of goods and assets; IT

and digitisation, policies in connection with the data exchange between the
two DGs, and human resource will also be placed in Revenue Division.

Decisions will be made jointly based on consultations with both the DGs.

The determination of value for imported goods through valuation rulings will
be carried out by a committee comprising equal representation from customs
and IR and placed before the Revenue Division.

The cabinet also cut the projected an increase in the tax-to-GDP ratio from
22% in 2027 to 18% of the GDP in 2029. The current ratio is 8.5%.

 

COMMENTS

Name (required)

Email (required)

Write your comment here

https://tribune.com.pk/story/2454981/cabinet-ecp-at-odds-over-fbr-overhaul 3/8
1/31/24, 10:21 AM Cabinet, ECP at odds over FBR overhaul

Post comment

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ

THE EXPRESS TRIBUNE   YouTube 84K

Sanaa Stands with Gaza: Yemenis PTI Faces Setbacks: Imran Khan's 10- Iranian-Pakistani Diplomacy: High- Imran Khan and Qureshi Se
Demonstrate Solidarity Against U.S. and Year Sentence and Election Symbol Ban Stakes Talks to Mend Ties Post-Strikes Years in Cipher Case Amid C
Israel Cast Shadow Evidence

LATEST

Right to vote vital democracy: SC

PML-N strengthens grip in AJK

PTI leaders slam verdict; appeal for calm

ATC allows Fawad’s jail investigation

Merged districts prepare for historic moment

https://tribune.com.pk/story/2454981/cabinet-ecp-at-odds-over-fbr-overhaul 4/8
1/31/24, 10:21 AM Cabinet, ECP at odds over FBR overhaul

Electoral crown jewel Punjab ready for scintillating contests

T.EDIT

Skincare 101: Common Mistakes You’re Making in Your Skincare Routine

Style 101: MIRI by Sabbiha Mnasoor

The Travel Edit

ON EXPRESS URDU

‫ تین روز میں حملے کی دھمکی ٓامیز کال موصول‬،‫اڈیالہ جیل پر دہشت گردی کا خدشہ‬

https://tribune.com.pk/story/2454981/cabinet-ecp-at-odds-over-fbr-overhaul 5/8
1/31/24, 10:21 AM Cabinet, ECP at odds over FBR overhaul

‫ افراد زخمی‬5 ‫الہور میں ن لیگ کی انتخابی ریلی پر فائرنگ سے‬

‫کراچی کے مختلف عالقوں میں ہلکی اور تیز بارش‬

‫کراچی؛ جھگڑے کے دوران باپ نے بیٹے کو قتل کردیا‬

‫ شاہ محمود قریشی‬،‫ میرا بیان لینے سے پہلے ہی جج نے فیصلہ سنا دیا‬،‫ میچ فکس تھا‬:‫سائفر کیس فیصلہ‬

‫ شہباز شریف‬،‫الہور میں پانی نلکوں میں ٓاتا ہے جبکہ کراچی میں ٹینکر سے ملتا ہے‬

MOST READ

Imran, Qureshi sentenced to 10-year imprisonment in cypher case

PTI activist Sanam Javed withdraws candidacy from NA-119

JIT puts CJP Isa's assurances on trial

SBP all set to replace currency notes in circulation to curb corruption

https://tribune.com.pk/story/2454981/cabinet-ecp-at-odds-over-fbr-overhaul 6/8
1/31/24, 10:21 AM Cabinet, ECP at odds over FBR overhaul

Imran wants talks, but ‘establishment is not ready’

SC directs FIA to withdraw notices issued to journalists

OPINION

Need to change the system

Let there be light!

Elections can be a vehicle for change

A rights-based approach to resilience in Pakistan

Reclaiming the lost heritage of Ram Temple

India exporting terrorism to NATO member states

You May Like Sponsored Links by Taboola

https://tribune.com.pk/story/2454981/cabinet-ecp-at-odds-over-fbr-overhaul 7/8
1/31/24, 10:21 AM Cabinet, ECP at odds over FBR overhaul

Bannu: Click Here To See The Price Of Solar Panels

Solar Panels | Search Ads

New 3BHK Lofts In Bannu:(Take A Look At Prices)

3BHK for Sale | Search Ads Search Now

Adjustable Beds In HongKong - Price Might Surprise You

Gotolike Learn More

Unsold Sofas Selling For Nearly Nothing In Bannu!

Sofa In Mexico Search Now

Pakistan Life & Style Prayer Timing Pakistan About Us Style Guide FOLLOW US
Business T.Edit Weather Forecast Pakistan Online Advertising Privacy Policy
World Sports RSS Feeds Copyright
Opinion Blog Subscribe to the Paper Code of ethics
Videos Contact Us Mobile App
Careers

This material may not be published, broadcast, rewritten, redistributed or derived from. Unless
otherwise stated, all content is copyrighted © 2024 The Express Tribune.

https://tribune.com.pk/story/2454981/cabinet-ecp-at-odds-over-fbr-overhaul 8/8