FBR revamp to go ahead under SIFC decision amid opposition

ISLAMABAD: In order to implement the decision of Special Investment Facilitation Council (SIFC), the Federal Board of Revenue’s (FBR) top management will send a summary to the federal cabinet on the restructuring plan but it has decided to oppose private members as head of Inland Revenue and Customs boards in writing.

“Whatever is not in the larger interest of revenue generation efforts, the FBR will oppose it tooth and nail,” top official sources confirmed to The News on Tuesday. It is yet to ascertain as to how the private members, after getting the position of chairman of boards, would ensure that there would be no conflict of interest. The SIFC has approved the restructuring plan of the FBR and assigned the chairman/Revenue Division secretary to prepare and send summary to the cabinet in 15 days.

Top official sources said that the SIFC possessed overriding on all directives and its directive would be fully complied. However, the FBR’s top guns would oppose in writing private members as head of boards in Inland Revenue and Customs side as well as inclusion of different federal secretaries into the boards. There has been an impression within the ranks of the FBR that the mighty DMG officers found space to clinch positions over and above the director generals (DGs) of Inland Revenue of FBR and Federal Board of Customs. It might also erode the accountability mechanism because if all these top notches secretaries were appointed on the boards, then they might close their eyes to any wrongdoings of subordinates in IRS and Customs.

There has been another apprehension if the tax revenue generation will go up or there was no commitment. On appointment of private members, one top official reminded the episode of last one and half decades when the audit was outsourced to private firms after which a fiasco had surfaced and ultimately, the government had to shelve its decision of outsourcing of audit.

Caretaker Minister of Finance Dr Shamshad Akhtar had proposed a new governance structure for the FBR to establish separate Federal Board of Customs and Federal Board of Inland Revenue and appointment of DGs from respective cadres as their heads. The separate Oversight Boards for Customs and Inland Revenue Administrations to be chaired by independent high caliber professionals, and members of the board will include public and private sector representation nominated through proper criteria and right expertise and integrity. The focus of reforms will be on strengthening the governance with accountability through oversight boards. The reconstitution of the Federal Policy Board under the minister for finance with the secretary Revenue Division will report to the Federal Policy Board with a new policy mandate. The Tax Policy Office will be constituted with HR having right expertise, including taxation and industry professionals under the Federal Policy Board, which will look after harmonization of assets valuation modalities and legal and regulatory framework of taxation regimes and promote revenue and policy coordination. The proposed reforms will be implemented within existing allocation of resources of the FBR. The governor SBP advised that the audit function of FBC and FBIR would be placed under the Tax Policy Unit (TPU) for ensuring independence.