Success eludes Shamshad bid to forge consensus on FBR revamp

ISLAMABAD: Caretaker Minister for Finance Dr Shamshad Akhtar on Friday visited the FBR’s headquarters in her last-ditch efforts to convince both the Inland Revenue Service (IRS) and Customs group on a drastic restructuring plan but failed to evolve consensus.

The caretaker finance minister stayed at the FBR headquarters for a few hours. Except for the authors of the proposed restructuring plan belonging to the Customs group, all remaining officers of both the IRS and Customs group vehemently opposed the restructuring plan in the face of visiting minister who failed to convince them.

There was no answer to how the proposed plan would help jack up tax-to-GDP ratio. Although, there is a wish to increase the tax-to-GDP ratio, no one knows how to do it.

The minister reportedly blamed the media for launching a campaign against the restructuring plan and stated that the concerns of concerned officers would be handled at the implementation stage. She hinted that the summary would be forwarded to get approval from the cabinet.

The sources said the FBR chairman explained his position and took the stance that no information was leaked from the FBR. He said the media obtained information from the minutes of the SIFC meeting and then criticised it when everything became available in the public domain.

The meeting, which was attended by the FBR members, chief commissioners, Customs collectors and all other relevant heads of the FBR, continued for hours on Friday. Only the Friday prayer was allowed but the hours long meeting remained unable to evolve consensus over the restructuring plan.

Caretaker Finance Minister Dr Shamshad Akhtar illustrated in her proposed plan that a new governance structure for the FBR would be established through 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 are to be chaired by independent high-calibre 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 the reforms will be on strengthening governance with accountability through oversight boards. The reconstitution of the Federal Policy Board under the finance minister 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 the right expertise, including taxation and industry professionals under the Federal Policy Board, which will look after the 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 the existing allocation of resources of the FBR. The SBP governor advised that the audit function of FBC and FBIR would be placed under the Tax Policy Unit (TPU) for ensuring independence.