Chalking out tax policy: 'Fiscal Policy Board' to be empowered

The Fiscal/ Tax Policy Board of the Ministry of Finance would be empowered to chalk out the tax policy, including increase/ decrease in tax rates after obtaining inputs from all stakeholders, including the private sector. A member of the Tax Reform Co-ordination Group (TRCG) told Business Recorder here on Friday that the government would soon finalise modalities for setting up the 'Fiscal Policy Board' or 'Tax Policy Board'.
The Fiscal Policy Board would be the appropriate forum for proposing taxation measures, and reviewing the tax rates. It would be empowered to propose measures for removing distortions in the taxation system and tax relief to the business and trade. The recommendations of the 'Board' would be duly drafted after obtaining inputs from business and trade. The board is expected to comprise members including leading chartered accountants, tax experts/economists and representatives of overseas chamber, export sectors, federations and investors, etc.
The 'board' would be empowered to propose taxation measures or adjustment in tax rates for final consideration of the Finance Ministry. Sources said that the government is in the process of setting up 'Fiscal/Tax Policy Board' to take tax policy measures in the light of suggestions of the private sector. It is expected that the Board would be the most appropriate forum for drafting tax policy, keeping in view experience of Tax Reform Co-ordination Group, Revenue Advisory Council (RAC) and Economic Advisory Council (EAC).
Sources said that the proposal is to constitute a high-powered 'Fiscal Policy Board' headed by the Finance Minister, having members from the private sector. Under the proposal, the FBR has to amend the Federal Board of Revenue Act 2007 to obtain legal backing for setting up of the Fiscal Policy Board. The concept of including private sector in the Fiscal Policy Board is in line with the best international practices of public-private partnership.
One of the key objectives of the 'Fiscal Policy Board' is to implement government policies. Secondly, it should be assigned the task of framing fiscal policies of the country and proper functioning of the taxation system with inputs from the private sector. The Fiscal Policy Board may also have the authority to devise policies to ensure equity in tax system to check mismatching of sectoral contribution in the taxes.