Tax Policy Shift: Finance Division Takes Over from FBR

The government has made a major change in how tax policy is set in Pakistan. From now on, the Finance Division, not the Federal Board of Revenue (FBR), will be responsible for all tax policy decisions. The next federal budget will be prepared by the new Tax Policy Office within the Finance Division, marking a clear separation between tax policy-making and tax collection. This shift was announced during a meeting of the Senate Standing Committee on Finance, chaired by Senator Saleem Mandviwalla. Finance Minister Muhammad Aurangzeb explained that the Prime Minister is personally monitoring the FBR’s transformation, with regular reports to ensure accountability. The new Tax Policy Office is almost fully staffed, and an advisory board, including members of Parliament and the private sector, will soon be formed to guide future decisions. The committee also addressed other major fiscal concerns, including the FBR’s handling of a presidential order. Attorney General Mansoor Usman Awan attended the session, where complaints were raised that the FBR had challenged a presidential directive in the Sindh High Court instead of following it. Lawyers for affected citizens argued that the FBR was legally required to implement the President’s instructions and had ignored clear guidance from both the Prime Minister’s Office and the Ministry of Law. The Attorney General was asked to help resolve the dispute. On the economic front, Minister Aurangzeb highlighted positive developments, such as Pakistan’s successful Eurobond repayment—a sign of improved financial discipline. He also mentioned ongoing talks with China for a $250 million Panda Bond issuance by the end of November, as part of a larger billion-dollar investment plan. Committee members welcomed the updates but stressed the importance of government bodies, including the FBR, following presidential and ombudsman orders to ensure good governance and accountability.