FBR chief ready to send revamp summary, seeks ECP endorsement

ISLAMABAD: Secretary Revenue Division/FBR Chairman Amjad Zubair Tiwana seems ready to send the summary for restructuring of Federal Board of Revenue (FBR) to the cabinet with a caveat that the Election Commission of Pakistan’s endorsement should be sought at the implementation stage.

The military establishment, especially the officer who is looking after the Special Investment Facilitation Council (SIFC), played a critical role in narrowing down the differences and convincing the secretary Revenue Division/FBR chairman to sign the summary and send it to the Cabinet Division for consideration. The message was loud and clear, so the incumbent Secretary Revenue Division/FBR chairman had two options i.e. send the summary or go home.

Now the summary has been prepared and after the signature of secretary Revenue Division, it could be forwarded to the cabinet anytime this week starting from today (Monday). This scribe sent out a question to the FBR chairman on Sunday evening but got no reply.

However, sources said the FBR chairman had entered into an awkward position where he had succumbed to the pressures and had to agree to the proposal floated by the caretaker minister for finance. The military’s top brass did not ask any side to accept their viewpoint but they asked them to find out the middle ground acceptable to all sides.

“Chances are that both the IRS and Customs officers may approach the judiciary once the federal cabinet grants its nod,” said one official who added that they were confident that they would be taken into confidence but the top guns preferred to go ahead.

One top tax expert, while referring to the official minutes of SIFC meeting, stated that he had read the minutes and thought everything stands decided.

Both the oversight boards will be headed by chairmen from the private sector. The two boards will have both private and public members and the public members will probably also not be from the FBR except the DG of IR and Customs.

He said the Federal Policy Board will work under the finance minister and will not have anyone from the IR or Customs. The secretary Revenue Division will be reporting to the Federal Policy Board. The tax policy office will also be reporting to the Federal Policy Board. The tax policy office will probably also be dominated by private professionals. The two service groups will also be headed just by DGs, and there doesn’t seem to be any scope for members working under them.

“Everything seems to have been decided, so what is Tiwana sahib now resisting? I think the news of his not initiating the summary for the cabinet is being spread by him to save face and appear as a hero trying to struggle for the interest of IRS. The FBR chairman already has conceded to everything as is obvious from the minutes,” the expert added.

The summary is going to propose that a new governance structure for the FBR will 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-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 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 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 governor SBP advised that the audit function of FBC and FBIR would be placed under the Tax Policy Unit to ensure independence.