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FBR reform plan in works amid opposition over private members

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10 months ago

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  • FBR top management will send summary to cabinet. 
  • SIFC has approved the restructuring plan of the FBR. 
  • Reforms aim at strengthening governance with accountability.

ISLAMABAD: The Federal Board of Revenue’s (FBR) top management will send a summary to the federal cabinet on a reform plan to implement the decision of the Special Investment Facilitation Council (SIFC), The News reported on Wednesday.

However, the FBR 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,” 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.

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 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 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 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 (TPU) to ensure independence.

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Business

Dar chairs the CCOP meeting; Blue World’s bid offer of Rs.10 billion is rejected.

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3 days ago

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The Foreign Minister/Deputy Prime Minister chaired the Cabinet Committee on Privatization meeting.

Other committee members who attended the conference included the Federal Secretaries of several Divisions, the Ministers of Finance and Revenue, Industry and Food, Commerce, Power, and Privatization.

The CCOP took the PC Board’s recommendation into consideration and suggested that Blue World’s bid of 10 billion rupees for the sale of 60% of PIACL’s shares be rejected. The bid was rejected by the CCOP, who chose to follow the PC Board’s advice.

The government’s determination to sell out PIACL through government-to-government or privatization was reaffirmed by the CCOP.

The CCOP was pleased with the Aviation Division’s evaluation of PIACL’s sound financial standing.

Additionally, the CCOP established a committee, chaired by the Minister of State for Finance, to assess potential transaction possibilities for the privatization of the Roosevelt Hotel and the appropriate modes of adoption in light of existing legal rules.

Prior to its subsequent meeting, the CCOP also ordered that all difficulties be resolved and an agreement for the selling of services to an international hotel be concluded.

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The KSE-100 Index has surged by 790 points, resulting in an all-time peak for the stock exchange.

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3 days ago

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The benchmark KSE-100 Index increased by 790 points, marking a new all-time high for the Pakistan Stock Exchange (PSX) at 94,982 points.

The record-breaking performance underscores a surge of optimism and investor confidence in the stock market.

As investors responded to favorable economic signals, the market experienced a significant increase of over 500 points in early trading. Later, the KSE-100 Index reached another record level of 94,786 points after adding 594 points to its upward trajectory.

This positive development comes as the State Bank of Pakistan’s (SBP) foreign exchange reserves saw an increase of $84 million, reaching $11.26 billion during the week ending November 8, according to data released by the central bank on Thursday.

This represents an increase of 0.75% from the previous week. In addition, the nation’s total liquid foreign reserves experienced a modest increase, increasing by $33.7 million or 0.21% week-on-week to $15.97 billion.

In contrast, commercial banks’ reserves experienced a decline of $50.3 million or 1.06%, ultimately settling at $4.71 billion.

Furthermore, the economic team of Pakistan has expressed confidence in the discussions with the International Monetary Fund (IMF). Minister of State for Finance Ali Pervaiz Malik, in an exclusive conversation with Samaa TV, claimed talks were moving in a positive direction.

Highlighting improvements in Pakistan’s economic conditions, Malik noted substantial progress over the past six months to a year. He emphasized that Pakistan’s current economic situation has seen significant enhancement, with a reduced current account deficit of only $100 million in the first quarter, a reflection of the government’s strategy to increase remittances and boost exports.

Malik shared that discussions with the IMF are primarily focused on external financing, and while there have been speculations about a potential mini-budget or an increase in the petroleum levy, he clarified that these are currently premature considerations.

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Positive IMF negotiations propel KSE-100 Index above 94,000 points

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4 days ago

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As a result of investors’ optimism about the reported progress in the continuing talks with the International Monetary Fund (IMF), the Pakistan Stock Exchange (PSX) experienced a robust surge.

The benchmark KSE-100 Index of the PSX, which tracks market sentiment, rose 713 points to a new record high of 94,068 points, breaking above the 94,000-point barrier, as the trading session began.

Early in the day, the stock market began its upward trajectory as the KSE-100 Index steadily rose, gaining 574 points to reach 93,932 points. A possible agreement with the International Monetary Fund (IMF) might lead to more fiscal stability and back Pakistan’s economic reforms, which is why investors are so optimistic about the country’s future.

Officials from the Federal Board of Revenue (FBR) informed the International Monetary Fund (IMF) on Wednesday that the government would not be introducing a mini-budget and would instead continue to aim to collect Rs12,970 billion in taxes each year.

In line with continuing discussions with the Fund, FBR sources revealed that petroleum goods will not be subject to the General Sales Tax (GST).

The fact that Pakistan’s tax-to-GDP ratio has increased from 8.8% to 10.3%, a 1.5% gain viewed as a favorable sign of Pakistan’s fiscal policies, has reportedly pleased the IMF, who has voiced satisfaction at Pakistan’s recent economic performance.

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