ISLAMABAD: In an extraordinary development late Friday night, the Federal Board of Revenue (FBR) has separated sales tax/federal excise duty and income tax departments against the spirit of reforms, integration and harmonisation of taxes.
In this regard, the FBR on Friday transferred and posted 54 Inland Revenue officials (BS-17 to BS-21) to the newly created post of Member, Sales Tax & FED (Technical).
From January 2027, the taxpayers would deal with separate Commissioners of Sales Tax and Income Tax. Therefore, the business community would go to three different departments i.e. Sales Tax, Income Tax and Customs Department- a disaster for the taxpayers.
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Dr. Muhammad Sarmad Qureshi (Inland Revenue Service/BS-21) has been appointed as new Member, Sales Tax & FED (Technical).
The organisational structure of the FBR has been revised under this new reporting system of the FBR.
It is learnt that the Board-in-Council of the FBR had approved the creation of the post of the Member, Sales Tax & FED (Technical), Federal Board of Revenue (Hq), Islamabad
Till filing of this story, the FBR has not notified the post of the Member, Income Tax (Technical), Federal Board of Revenue (Hq), Islamabad.
Apparently, this means that the income tax affairs of taxpayers would continue to be dealt with by FBR Member Inland Revenue (Operations) and separate sales tax zones would be created in the field formations.
Top tax experts told Business Recorder that if the Member, Sales Tax & FED (Technical) would report to FBR Chairman, whether the Chief Commissioners would report to Chairman FBR or FBR Member IR (Operations)?
If the income tax payers would continue to report to FBR Member IR (Operations), then what is the rationale behind separating the sales tax affairs from the income tax department, tax experts questioned.
The separation of sales tax and income tax would be a serious setback for the taxpayers, who would now report to separate Commissioners and Members and their work would become complicated in the field formations.
The new hybrid model of tax machinery would result in huge shuffling of cases of income tax and sales tax of taxpayers. This anti-reform measure would separate income tax and sales tax affairs of the taxpayers in the field formations. Apparently, the income tax and sales tax record of taxpayers seems to be separated under the new organisational structure of the FBR.
The federation and provinces are moving towards integration and operations of the taxes under one roof, but creation of the post of the Member, Sales Tax & FED (Technical), Federal Board of Revenue (Hq), Islamabad.
The biggest problem would be faced by taxpayers who would now deal with separate tax officials and offices for dealing with the income tax and sales tax affairs.
Tax experts have requested the FBR Chairman to issue a detailed clarification about the powers and functions of the post of Member, Sales Tax & FED (Technical) and remaining powers and jurisdiction of FBR Member Inland Revenue Operations for guidance of the taxpayers to end this confusion.
Copyright Business Recorder, 2026