The Caretaker Federal Government is in the process of establishing aNational Tax Authority as part of its broader reform agenda for the FederalBoard of Revenue (FBR), according to sources.
FBR Chairman Amjad Zubair Tiwana recently briefed Caretaker Prime MinisterAnwar-ul-Haq Kakar on the comprehensive reform agenda aimed at enhancingtax collections and restructuring the relationship between tax policy andadministration or enforcement.
To achieve these goals, the FBR has initiated the implementation of taxreforms, considering the separation of the policy department from the FBRand placing it under the jurisdiction of the Ministry of Finance.
There is also a possibility of merging all tax authorities, including boththe FBR and Provincial Tax authorities, into a unified National TaxAuthority. This move seeks to introduce a simplified and cohesive taxationsystem.
As part of the reforms, the FBR has outlined plans to overhaul thewithholding tax regime. Notably, despite the retail sector contributing 18percent to the country’s Gross Domestic Product (GDP), its tax contributionstands at only 4 percent.
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To address this, the government plans to compel all private sector banks toshare details of distributors and wholesalers with the FBR to generate taxdemand.
Furthermore, the tax reform program proposes the establishment of a specialCustoms Board to oversee the operations of Pakistan Customs. This board isexpected to include at least five federal secretaries, covering Finance,Industries and Production, National Food Security, Commerce, and Interior,as ex-officio members.
In a bid to streamline operations, the government has decided to create theposition of ‘Member Appraisement’ within the Customs Department. This moveaims to separate the appraisement process from operations and enforcementactivities.