FBR on operations/enforcement side: tax policy, budget finalisation may be carved out by Revenue Division

The tax policy including finalisation of the federal budget is expected to be carved out by the policymakers of the Revenue Division and the Federal Board of Revenue would be confined to operations/enforcement side while giving their vital input on budgetary proposals to the Revenue Division.
Sources told Business Recorder on Monday that the government is in the process of clearly defining the role of tax officials dealing in tax policy under the Revenue Division and Members of the FBR. The first proposal is that three Additional Secretaries be appointed for Tax Policy under the Revenue Division. These are Additional Secretary Customs, Additional Secretary Sales Tax and Additional Secretary Income Tax. In case this proposal is not materialised, there should be Additional Secretary Inland Revenue and Additional Secretary Customs to deal with the tax policy matters.
As per first proposal, at least three Additional Secretaries would operate under the Revenue Division for tax policy. The second option is to create posts of two Additional Secretaries for Tax Policy within the said Division. At present, officials of the Revenue Division are mulling over different proposals to work out some viable organisational structure under which a viable tax policy be formulated every year with the input of the FBR. So far, various options are being considered to finalise the structure of the proposed unit to deal with the tax policy under Revenue Division.
The basic idea behind the proposal is to separate policy from operations of the tax related issues. The separation of tax policy from operations would ensure accountability, transparency and smooth functioning of the tax machinery for enforcement, recovery and tax collection at the level of the field formations.
According to the proposal, the tax policy would be taken over by the policymakers of the Revenue Division. The FBR would be given the basic task of enforcement and operations with input in the federal budget. Under the proposal, federal budget, which is the biggest instrument of the tax policy, would be handled by the Revenue Division with the input of the FBR. It has been proposed to set up a small unit comprising 4-5 senior tax officials to run the Tax Policy Unit of the Revenue Division.
The Tax Reform Co-ordination Group (TRCG) and the FBR have already strongly endorsed the creation of the new post of the Additional Secretary Tax Policy under the Revenue Division to exclusively deal with the tax policy matters. The rationale behind the creation of the post of the Additional Secretary Tax Policy is that the Revenue Division should deal with the policy side whereas the FBR would handle the operational side of the tax-related matters. The policy matters would be handled by the Revenue Division and operational issues would be looked after by the tax machinery. This structural change in the tax policy would facilitate the FBR to obtain direct input of policymakers in finalisation of the new tax policy.