The government is considering setting up a new tax collection agency or restructuring the existing system after finding the Federal Board of Revenue’s (FBR) performance unsatisfactory despite repeated reforms.
According to directives issued by the Prime Minister’s Office on Thursday, the FBR will present comprehensive proposals on HR reforms and restructuring to Prime Minister Shehbaz Sharif on October 19.
Officials said the idea of a new organisation was raised at a top-level meeting last Saturday, and FBR Chairman Rashid Langrial has asked officers to prepare a plan. Sources said talks are at an initial stage, and no proposal has been finalised.
The FBR spokesperson said reform was an ongoing process and no comment could be made until any proposal became formal policy. The FBR also denied outsourcing revenue collection to a private company, calling the claim totally baseless.
Transferring the FBR’s powers to a new agency would require amendments to the FBR Act 2007 and at least four tax laws. An official said the FBR would not be dissolved, and officers who do not opt for the new body would remain until retirement.
The tax-to-GDP ratio stayed at 10.3 percent last fiscal year, and the FBR missed its annual target by over Rs1.1 trillion. This year’s target of Rs15.263 trillion requires growth of over 17 percent, but collection grew by only about 7 percent in the first quarter. Sources expect growth of around 12 percent, leaving a shortfall of over Rs650 billion.
The FBR said collection rose from Rs9.2 trillion to Rs13 trillion in two years under its transformation plan. Of the 19 million people holding national tax numbers, only 6.9 million had filed returns by Thursday evening, against 8.5 million last tax year.
The FBR said it has introduced faceless assessment in Customs, digital invoicing, and an AI-based risk management system for audits.