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ISLAMABAD: The caretaker government is rapidly advancing plans to restructure the country’s revenue machinery, with an ordinance aimed at reducing reliance on human discretion and enhancing the stagnant tax-to-GDP ratio likely to be promulgated within the next fortnight.
Informed sources said the caretaker government and other key stakeholders, except the revenue staff, were determined about the restructuring and reorganisation of the federal revenue machinery and wanted the plan well before the general elections scheduled on Feb 8, despite strong internal resistance from entrenched beneficiaries.
An ordinance for restructuring the Federal Board of Revenue (FBR) could be promulgated this month, provided caretaker Finance Minister Dr Shamshad Akhtar is able to convince the federal cabinet and the Special Investment Facilitation Council (SIFC) about the effectiveness of the proposed independent structure and the stature of the members of oversight policy boards capable of ensuring an effective, equitable and progressive tax regime.
The SIFC has already signalled preliminary approval for the restructuring plan. An official said the federal cabinet may take up a formal and updated summary before the weekend, explaining that the caretakers had the justifications to push for the FBR’s reorganisation. This move, however, faces staunch opposition from the tax bureaucracy and their political allies, who have historically resisted such reforms.
The caretakers, particularly Dr Akhtar, attribute the country’s underwhelming tax performance to the FBR’s outdated organisational structure.
Their strategy aims to eliminate inefficiencies and introduce accountability mechanisms to combat corruption and underperformance. This includes appointing non-FBR members to oversight boards, thereby disrupting the conflict of interest that currently hampers optimal tax collection and management.
