The government will be establishing a Tax Policy Unit in the Ministry of Finance after a delay of two years as Finance Minister, Dr Hafeez Shaikh has approved the development of new unit which will take away policy formation powers from the Federal Board of Revenue (FBR).

The approval by Dr Hafee was given in the fifth meeting of the FBR Policy Board, which was also attended by Minister for Privatization, Mohammadmian Soomro, Commerce Adviser, Abdul Razak Dawood, Adviser on Institutional Reforms, Dr Ishrat Husain and Special Assistant on Revenue, Dr Waqar Masood.

Prime Minister Imran Khan had also earlier approved the plan in the cabinet meeting held on November 29, 2018, but the tax bureaucrats caused the delay to separate tax policy from the tax administration.


The delay was witnessed in implementing the decision on the Inland Revenue (IR) — income tax, sales tax and federal excise duty. Now as per the new approval, the tax policy unit will be created under the administrative control of the Finance Division.

An official announcement issued after the meeting said, “A new setup would be created that will include members from FBR and also engage fiscal and economic experts from academia, think tanks and private sector to present holistic proposals for mobilizing revenue generation with greater autonomy”.

The statement also said that the new body will work out policy recommendations for domestic tax collection on the lines of the Tariff Policy Board, to deal with customs policy issues and operates under the Ministry of Commerce.

“The finance minister further directed the FBR to expedite the process of income tax refunds of less than Rs50 million (each recipient) to uphold commitment of the government to facilitate taxpayers,” according to the statement issued by the ministry.


It also added that the FBR’s Technical Committee apprised the Policy Board about the measures taken to identify anomalies and simplify the taxation system for a better understanding of the business community.

In this regard, the board requested to include senior representatives from the Ministry of Commerce and Ministry of Industries & Production for better coordination and effective policymaking.

Mr Hafeez directed to disseminate relevant information about the working of complaint registration mechanism and ensure the contact details are readily available for public consumption.

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