ECP bars caretaker govt from FBR reforms

ISLAMABAD: A few hours after the federal cabinet approved carrying out major reforms in the Federal Board of Revenue (FBR), the Election Commission of Pakistan (ECP) barred the caretaker set up from the restructuring of the tax department.

The ECP has written a letter to the federal government, stating that only the elected government can make reforms in the FBR. The letter has addressed to the Principal Secretary of the caretaker Prime Minister Anwaarul Haq Kakar.

The letter said that the federal cabinet had formed a new inter-ministerial committee last week, with the aim of making final recommendations for the restructuring of the FBR within four days. The committee was supposed to reduce the disparity between various tax groups.

The proposed reforms were prepared in a closed-door consultation with a selected group led by caretaker Finance Minister Shamshad Akhtar. However, the federal cabinet appointed Shamshad Akhtar as the head of the inter-ministerial committee, instead of appointing a new minister.

Sources said that the tax authorities were concerned about the haste and specific intervention by the caretaker finance minister in the ‘tax administrative mechanism’. As a result, the ‘Establishment’ intervened to minimize the losses and presented a summary to the federal cabinet.

A source said that the reforms would not yield the expected results until the political circles tax agricultural income, retail sector and services. It added that previous experiences showed that the changes were made only to create names and benefit specific individuals, while ignoring the basic challenges.

The report said that a new Federal Policy Board (FPB) would be formed, which would be led by the Finance Minister. The board would consist of experts in tax policy and administration, economics and industry, who have no conflict of interest. The board would report to the Revenue Division Secretary, who would be appointed from the Customs or IRS service cadre.

The board and the Revenue Division secretary would prepare tax policies, allocate revenue targets and link all strategic issues with the stakeholders. The policy formulation would be sent back to the board from the Finance Division.