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ISLAMABAD: The Cabinet Committee on Institutional Reforms, Monday, sought the viewpoint of the Revenue Division (RD) to re-valuate the status of the Federal Board of Revenue (FBR) and present the case before the Cabinet for determination of its status.

Sources told Business Recorder that the question arises whether the status of the FBR is an Autonomous Body. The legal status of the FBR would be determined by the Revenue Division under the FBR Act 2007, and other relevant laws.

Official communication to FBR Chairman Muhammad Javed Ghani from the Prime Minister’s Office on Monday stated that the federal government had approved a report of the Task Force on Austerity and Restructuring in its meeting held on July 9, 2019, and constituted a committee for the implementation of the recommendations of the task force. In the instant report, the FBR was proposed to be categorised as an “Autonomous Body” under the Revenue Division.

The issue was discussed in the 19th meeting of the Cabinet Implementation Committee held on January 7, 2020 and it was decided to postpone this agenda. Now the federal government has completed categorisation exercise of all the entities of the federal government and only a few are pending including the FBR.

These all entities will be notified by the Cabinet Division and inserted in the Schedule of the Rules of Business with the approval of the Federal Cabinet. Accordingly, it is requested that the Revenue Division may re-valuate the status of the FBR and present the case before the Cabinet Committee on Institutional Reforms for determining the status of the FBR.

It is important to mention that the finance minister accorded approval to the establishment of “Tax Policy Unit” under the administrative control of the Finance Division to suggest holistic proposals for mobilising revenue generation with greater autonomy.

A meeting of the FBR Policy Board meeting presided over by the finance minister had decided that a new setup would be created that would have members from the FBR and also engage fiscal and economic experts from academia, think tanks, and the private sector to present holistic proposals for mobilising revenue generation with greater autonomy.

Earlier, the FBR made a presentation to the meeting regarding establishment of Tax Policy Unit, in accordance with the decision of the cabinet dated 29 November, 2018, and members of the Policy Board, highlighting the advantages of keeping tax policy function independent of administrative function.

After deliberation, the finance minister accorded approval to the decision. The Tax Policy Unit would work out policy recommendations for domestic tax collection on the lines of the National Tariff Commission, which operates under the Ministry of Commerce.

Copyright Business Recorder, 2021