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ISLAMABAD: Federal Cabinet will take up the summary of the Revenue Division on the restructuring of the Federal Board of Revenue (FBR) and digitisation of initiatives/projects of the FBR on Tuesday (today).

Sources told Business Recorder that the summary has suggested creation of Oversight Boards of Customs and Inland Revenue for the supervision and monitoring of the tax machinery. The most important mandate of the FBR i.e. Tax Policy would also be taken away from the FBR. The summary of the Revenue Division would be taken up by the Cabinet in its meeting to be held on Tuesday (today).

Around 1,000 amendments would be required in different laws under the Board’s restructuring. These included new legislation, amendments to the existing laws and abolition of old laws. The new laws would be introduced and some existing laws would be repealed.

The FBR’s Oversight Boards would only give policy guidelines and Oversight Boards would not have any executive role and the chain of command of the FBR would not be distributed. The administrative role of the tax officials would remain the same. Tax authorities have repeatedly raised their concern over the presence of private members on the Oversight Boards, which would be a total conflict of interest.

Top FBR officials had resisted that the private members should not be appointed to the Oversight Boards to avoid conflict of interest.

Presently, the FBR only gives its technical input on budget proposals and revenue impact, but the federal government, cabinet, and parliament give approval to the Finance Bill.

Sources said that the Customs side has requested the caretaker finance minister to retain powers as well as functions mentioned in the Customs Act, 1969.

According to the sources, the government is undertaking the FBR restructuring, and its finalisation requires amendments to the FBR Act of 2007. The FBR’s restructuring has two main components. The short-to-medium term plan of reforms is already underway covering digital invoicing dedicated documentation law and broadening the tax base. The long-term FBR’s restructuring included the constitution of the Customs Oversight Board and the Inland Revenue Oversight Board.

The proposed Customs Oversight Board and Inland Revenue Oversight Board would comprise FBR, the secretary Revenue Division; the secretary Finance Division; the secretary Commerce Division, and private members.

Almost all Boards have private members under the proposed restructuring plan.

The operational heads of the FBR would remain from services side (Inland Revenue and customs). The operations side would be controlled by the FBR officials and they would have total control. However, no private member would interfere in operations side of the FBR.

The performance evaluation of the proposed Director Generals of the IR and Customs would be done by the Customs Oversight Board and Inland Revenue Oversight Board. The key performance indicators (KPIs) would be assigned to the tax officials by the said Oversight Boards. The Boards would also evaluate the revenue collection performance and targets to be assigned to the IR and customs departments.

Copyright Business Recorder, 2024

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