Contextualizing FBR Restructuring


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There is encouraging news of restructuring of Federal Board of Revenue (FBR, but disturbing, rather shocking response of strike by one field formation and warning from tax officers “to approach the higher judiciary if the caretaker finance minister rushes the approval of the summary through the federal cabinet”. 

The various news reports confirm animosity between FBR high-ups and caretaker finance minister, Dr. Shamshad Akhtar. According to a news item, the FBR officials are also “warning the government about the potential risks to the financial independence of the federation if further fragmentation of administration and taxes occurs without a well-thought-out strategy”. A number of media reports published recently have confirmed the decision by the Special Investment Facilitation Council (SIFC) to separate Pakistan Customs and Inland Revenue Services (IRS) into two separate boards.

A media report published on January 11, 2024 claims: “Under the restructuring plan, there will be a Federal Tax Policy Board, an Oversight Board, a Federal Board of Customs, and a Federal Board of Inland Revenue. However, the current structure of the FBR will be retained without clear guidance on implementation”.

In the absence of any official sharing of documents, it is not advisable to comment on the merits of ongoing restructuring scheme of FBR. However, there is a consensus that comprehensive tax administration reforms, much-needed and long-overdue, must be through a public debate involving all stakeholders, rather than discussing and implementing the same behind the close bureaucratic doors.

The fundamental structural reforms of FBR should be part of National Election Manifesto as highlighted in a recent op-ed. Now that the general elections, scheduled for February 8, 2024, are only 24 days away, it is the time that all the contesting political parties agree that agenda for tax reforms would be the central theme of their respective election manifestos. Pakistan cannot come out of the prevailing economic crisis, the worst in its 76-year-old history, unless tax system is completely overhauled. This alone can ensure self-reliance for the country bringing relief for all citizens and bringing the nation back on the road to prosperity.  

Pakistan needs to increase revenue collection at all levels to improve tax-to-GDP ratio to a respectable level of 20-25 percent—presently it is only 9.2 percent. This is not possible unless elected Federal Government after consultation with provinces introduces harmonised sales tax on goods and services and establishes National Tax Agency (NTA). All existing tax authorities at federal and provincial levels should merge in NTA. The NTA should be modern, automated and efficient, manned by competent personnel and run by an independent Board of Management comprising officials of federal and provincial governments and independent professionals

The idea of restructuring of Federal Board of Revenue (FBR) presented in Need for National Tax Agency, Business Recorder, November 1, 2013 was later elaborated in various articles, Need for National Tax Authority, Business Recorder, October 20, 2017, A case for National Tax Authority—I, Business Recorder, November 30, 2018, A case for ‘National Tax Authority’—II, Business Recorder, December 2, 2018 and Case for All-Pakistan Unified Tax Service: PTI & innovative tax reforms, Business Recorder, August 31, 2018. 

The draft of national tax agency is available in Towards Flat, Low-rate, Broad and Predictable Taxes (revised/enlarged edition of December 2020, PRIME Institute, Islamabad) and in Tax Reforms in Pakistan: Historic & Critical Review (PIDE, Islamabad). 

There cannot be two opinions that FBR or any other tax collection agency needs to be run by a competent board as a short-term reform measure before all of these are finally merged into a single national tax authority. The officers of FBR in the past reportedly suggested the name: Pakistan Revenue Board (PRB). This body, whatever may be the name, should not only be responsible for collection of taxes for federal, provincial and local governments but also to administer various social and economic benefits and incentive programmes, otherwise tax compliance will remain a distant dream. 

People must get free education, quality healthcare, decent housing/transport plus social security, such as universal pension, disability allowance, old age benefits, income support, child support, just to mention a few, in lieu of paying due taxes as suggested in There’s need for new tax model, Business Recorder, February 26, 2021

The NTA can be assigned the task of collecting all taxes for the federation (levied in terms of Article 142 of Constitution of Islamic Republic of Pakistan [The Constitution]. This is necessary for reducing the monstrous size of multiple collecting agencies at federal and provincial levels that are marked with inefficiencies, incompetence and corruption and creating unnecessary compliance cost, rather than operating under one-window. Presently, taxpayers have to deal with multiple tax agencies adding to their cost of doing business.

On March 12, 2020, according to a Press release of Ministry of Finance, the National Tax Council [NTC] was established and its terms of reference (ToRs) approved. According to a Press report, “The harmonisation of GST is part of the World Bank’s budgetary support loan of US$750 to US$900 million”. It is mentioned in the report that as “suggested by International Monetary Fund (IMF), the centre and provinces have finally agreed to establish NTC “to resolve all tax-related issues, especially for the harmonisation of general sales tax (GST) across the country”. It confirms that our governments do nothing unless lenders/donors force them to do. It was decided that NTC would have technical level representations from the federation and federating units to resolve tax-related issues without amending the constitution.

The NTC has an executive committee, comprising federal finance secretary, Chairman of FBR, provincial finance secretaries and heads of the provincial revenue authorities, namely, Punjab Revenue Authority (PRA), Sindh Revenue Board (SRB), Khyber Pakhtunkhwa Revenue Authority (KPRA) and Balochistan Revenue Authority (BRA). 

The executive committee of NTC, despite repeated requests by this scribe in various articles and books mentioned above, has failed to recommend the establishment of NTA to Monitoring Committee of the National Finance Commission (NFC). It could have been done by amending the Federal Board of Revenue Act, 2007 and passing of resolutions by all the provincial assemblies under Article 144 of the Constitution. Now it is not possible unless all the provincial assemblies come into existence after general elections on February 8, 2024.   

The NTC should seriously consider the models of Swedish revenue authority [Skatteverket] and Canadian Revenue Authority (CRA) that not only collect taxes at all tiers of government but also extend benefits like social security, food stamps, universal pension and income support etc. The linkage of database of various bodies with NTA (complete digitisation) can be a great step towards an e-government model for the country that is presently non-existent

The complete roadmap for achieving this goal is discussed in Time up for fiscal integration—I, Business Recorder, December 21, 2018, Time up for fiscal integration—II, Business Recorder, December 23, 2018, Overcoming fragmented tax system, Business Recorder, October 19, 2018, Doing business under scattered taxation, Business Recorder, September 7, 2018 and Case for All-Pakistan Unified Tax Service: PTI & innovative tax reforms, Business Recorder, August 31, 2018. 

In the federal budget 2024 by a new elected government, the policymakers and legislature need to restructure the tax system to tap the real tax potential at national level and at the same time provide quality social services to the citizens, drastically cut wasteful expenditures, get rid of mess in energy sector and stop further bleeding of public funds on loss-bearing state owned enterprises (SOEs). The real dilemma of Pakistan is outdated, colonial-style administrative and judicial structures, elitism, cronyism, greed and corruption on the part of predatory elites


Dr. Ikramul Haq
Dr. Ikramul Haq
Dr. Ikramul Haq, Advocate Supreme Court, specialises in constitutional, corporate, media and cyber laws, ML/CFT, IT, intellectual property, arbitration and international taxation. He holds LLD in tax laws with specialisation in transfer pricing. He was full-time journalist from 1979 to 1984 with Viewpoint and Dawn. He served in the Civil Services of Pakistan from 1984 to 1996. He established Huzaima & Ikram in 1996 and is presently its chief partner as well as partner in Huzaima Ikram & Ijaz. He studied journalism, English literature and law. He is Chief Editor of Taxation. He is country editor and correspondent of International Bureau of Fiscal Documentation (IBFD) and member of International Fiscal Association (IFA). He is Visiting Faculty at Lahore University of Management Sciences (LUMS) and member of Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE). He has co authored with Huzaima Bukhari many books that include Tax Reforms in Pakistan: Historic & Critical Review, Towards Flat, Low-rate, Broad and Predictable Taxes (revised & Expanded Edition, Pakistan: Enigma of Taxation, Towards Flat, Low-rate, Broad and Predictable Taxes (revised/enlarged edition of December 2020), Law & Practice of Income Tax, Law , Practice of Sales Tax, Law and Practice of Corporate Law, Law & Practice of Federal Excise, Law & Practice of Sales Tax on Services, Federal Tax Laws of Pakistan, Provincial Tax Laws, Practical Handbook of Income Tax, Tax Laws of Pakistan, Principles of Income Tax with Glossary and Master Tax Guide, Income Tax Digest 1886-2011 (with judicial analysis). The recent publication, coauthored with Abdul Rauf Shakoori and Huzaima Bukhari is Pakistan Tackling FATF: Challenges & Solutions available at: and He is author of Commentary on Avoidance of Double Taxation Agreements, Pakistan: From Hash to Heroin, its sequel Pakistan: Drug-trap to Debt-trap and Practical Handbook of Income Tax. Two books of poetry are Phull Kikkaran De (Punjabi poetry 2023) and Nai Ufaq (Urdu 1979 with Siraj Munir and Shahid Jamal). He regularly writes columns for many Pakistani newspapers and international journals and has contributed over 2500 articles on a variety of issues of public interest, printed in various journals, magazines and newspapers at home and abroad. X: (formerly Twitter): DrIkramulHaq


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