ISLAMABAD: Minister for Finance Muhammad Aurangzeb Thursday said the legislation concerning the Agriculture Income Tax had been approved by the two provincial assemblies and the IMF was fully cognisant that progress was underway in Sindh and Balochistan.
He said this while talking to the reporters after attending a meeting of the Senate Standing Committee on Finance and Revenue here.
He informed the committee that the federal cabinet had approved the separation of policy and revenue collection and from the next fiscal year a policy unit would be established in the Ministry of Finance, while collection of revenue would be the FBR’s jurisdiction.
It is the structural benchmark of the IMF programme and it will be the last budget-making exercise when the FBR will formulate the tax policy for Fiscal Year 2025-26.
Chairman FBR Rashid Mehmood Langrial along with his team, including Member Operation IRS Dr Hamid Ateeq Sarwar, briefed the committee on tax collection and said certain assumptions had been changed in the first half of the current fiscal year resulting in a shortfall of Rs386 billion.
The tax-to-GDP ratio, he said, touched 10.8 percent of GDP in the second quarter (Oct-Dec) of the current fiscal year against the agreed target of 10.6 percent of GDP for the whole Financial Year 2024-25.
On the issue of Carbon Tax with replacement of some portion of Petroleum Development Levy by Senator Sherry Rahman, the finance minister replied that the World Bank had approved $20 billion loan under Country Partnership Framework (CPF) for six major areas including two related to climate resilience and he would respond after reviewing the whole issue.
Meanwhile, in a significant development, the government has halted the purchase of 1,010 vehicles till completion of scrutiny by the Public Procurement Regulatory Authority (PPRA) Board following Senator Faisal Vawda’s disclosure that he had received life threats from some FBR officers for raising the alleged scandal of vehicles’ purchase.
The firebrand senator shocked the committee and even Minister for Finance Mohammad Aurangzeb and Chairman FBR Rashid Mehmood Langrial when he disclosed that three FBR officers had threatened him.
He said the FBR high-ups had also raided the premises of a multinational company on January 22, 2025 as the letter of intent was issued to another company for procuring 1,010 vehicles of up to 1300cc.
On this point, the committee chairman Senator Saleem Mandviwalla said he had also received messages but did not name the people involved.
On this issue, the FBR chairman suggested criminal investigations. Vawda said he did not want any probe, as he could handle them properly and he knew how to give them a befitting response.
However, Langrial insisted on investigation by the FIA or any other law-enforcement agency because if a senator could be threatened, then he, the minister or even the cabinet members could also be threatened.
Aurangzeb said the FBR’s Transformation Plan would be implemented at all costs as they will have to kick-start the process of bringing the non-filers into the tax system. He said the matter raised by Senator Faisal Vawda would be referred to the FIA for probe.
Senator Vawda further stated that he knew the houses where about 100 FBR vehicles had been parked.
He also alleged that there were 54 corrupt officers involved in the gold and diamonds business and he knew from where they were getting their shares.
He said the FBR faced a revenue shortfall of Rs386 billion in the first six months and he would propose a unit which could share its strategy with the FBR to compensate the shortfall through the income of corrupt FBR officers.
He questioned why electric or hybrid vehicles could not be procured and why the FBR procured vehicles of 600 or 800cc and why leasing could not be allowed to procure with 50 percent cost bearing by the officers.
He said the fuel cost of Rs1.2 billion could be reduced with lower engine capacity vehicles.
Langrial said he would be ready to probe the reasons why the FBR raided the premises of a multinational company and this investigation could be assigned to any outsider or he would do the same if the committee trusted him. The Senate panel posed its trust and assigned the chairman FBR to ascertain the reasons.
Meanwhile, the Inland Revenue Service Officers Association (IRSOA) vehemently refuted the unsubstantiated allegations levelled by Senator Faisal Vawda.
The claims that three Federal Board of Revenue (FBR) officers issued death threats over the procurement of official vehicles are entirely baseless and represent a reckless attempt to tarnish the reputation of civil servants dedicated to national service.
IRSOA categorically denied any involvement of FBR officers in misconduct of this nature. “Our officers are committed professionals who adhere to the highest ethical standards in their efforts to strengthen revenue mobilisation and fiscal governance. The procurement process for official vehicles referenced by the senator was conducted in strict compliance with established protocols, including requisite approvals from the federal cabinet and austerity committees,” the IRSOA statement said.
The association urged Senator Vawda to promptly substantiate his allegations with credible evidence through appropriate legal and investigative avenues. “Publicly airing unverified accusations undermines the integrity of institutions and diverts attention from constructive discourse on national priorities,” it said.
IRSOA further expressed deep concern over the demoralising impact of such unfounded remarks on FBR personnel. The unwarranted scrutiny of a duly authorised administrative decision risks impairing operational efficiency and morale, potentially compromising the achievement of critical revenue collection targets essential to Pakistan’s economic stability. “We reaffirm our unwavering commitment to transparency, accountability, and the rule of law within tax administration,” it said. IRSOA called upon Senate leadership and relevant authorities to address this matter judiciously, ensuring parliamentary proceedings remained aligned with principles of fairness and the public interest.
It said IRSOA remains resolute in defending the dignity of its IRS officers while continuing to advance their mission of revenue collection and serving the nation with professionalism and integrity. IRSOA reserves the right to take the matter at any judicial forum if the need arises.
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