Policy Board functions shifted to MoF: FBR Act 2007 will be amended: Aurangzeb

ISLAMABAD: Finance Minister Muhammad Aurangzeb said on Wednesday that the government will amend the Federal Board of Revenue Act 2007 through the new Finance Act 2026 to shift the functions of the Federal Board of Revenue (FBR) Tax Policy Board from the FBR to the Ministry of Finance’s Tax Policy Office.Through legislation in the FBR Act 2007, the FBR’s policy board will be transferred to the Ministry of Finance, he added.The Finance Minister informed the Senate Standing Committee on Finance that the government has established the Tax Policy Office within the Ministry of Finance to independently analyse and develop fiscal policies, ensuring a clear separation between the fiscal policy formulation and revenue administration functions of the FBR.READ MORE: Aurangzeb informs PBC: Tax policy unit to be relocated to MoFThe establishment of the independent Tax Policy Office renders the functions of the Policy Board redundant at the FBR. Consequently, it is proposed to omit section 6 of the FBR Act 2007, along with all ancillary references to the Policy Board in the Act.Chairman FBR Rashid Mahmood Langrial said the next federal budget for 2026-27 about taxes, would be prepared by the Tax Policy Office. The Tax Policy function has been taken away from the FBR and transferred to the Tax Policy Office of the Finance Ministry. The operations and administrative functions would be carried out by the FBR.”“The Policy Board will become redundant after the creation of the Tax Policy Office in the Ministry of Finance,” the FBR Chairman said.In this regard, the Rules of Business and Federal Board of Revenue Act 2007 would require amendments to fully empower the Tax Policy Office to operationalize and conduct tax policy functions, the FBR Chairman said.Senator Talha Mahmood objected that the tax policy is a very technical function and FBR member should head the tax policy function.He regretted that the mindset of the tax officials is very negative and they consider every businessman a tax evader. The perception of FBR is so negative that anyone is ready to pay an extra amount in the form of a bribe to tax officials instead of paying a meagre amount of legitimate or admissible tax.On the other hand, he questioned the accountability of the tax officials and inquired about details of their assets. The assets of the tax officials should be investigated by the Federal Investigation Agency (FIA), the Senator added.Responding to this, the Finance Minister stated that the government is committed to taking action against black sheep within the tax machinery.All civil servants, including FBR officials, are bound to declare their assets to the government, Aurangzeb added.FBR Chairman referred to another amendment in the FBR Act that “the Secretary of the Revenue Division shall have the powers to appoint Members of the FBR through transfers and postings of the FBR of BS-21 and above.There are over 80 senior officials of Grade-21 working in the FBR, and there are frequent transfers and postings in the tax machinery, he added.To address the legal ambiguity and ensure administrative continuity, it is proposed that while the powers to appoint the Chairman and Members of the Board shall continue to vest in the federal government, the Secretary Revenue Division shall also be empowered to appoint Members of the FBR through transfers and postings of the officers in BS-21 and above placed at the disposal of the FBR, FBR Chairman added.Copyright Business Recorder, 2026

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