The Inland Revenue Service (IRS) has filed a petition with the Election Commission of Pakistan (ECP), requesting intervention to stop the interim government from restructuring the Federal Board of Revenue (FBR), a move they consider illegal and unconstitutional.
This petition was filed amidst discussions within a federal cabinet sub-committee, formed to review the proposed overhaul of the FBR.
At the core of the restructuring proposal is the separation of the Inland Revenue Board and the Federal Customs Board, along with distinguishing tax policy from operations.
Some tax officials reportedly have concerns regarding the caretaker finance minister’s rapid and selective approach to tax administration reform.
The federal cabinet on Tuesday established an inter-ministerial committee with the mandate to finalize recommendations for restructuring the Federal Board of Revenue (FBR) within a four-day deadline.
The IRS, responsible for collecting various domestic taxes, is contesting this move, which was initiated by the caretaker finance minister aiming to increase Pakistan’s tax-to-GDP ratio from 8.5% to 22%.
Deputy Commissioner Ali Saleh Hayat Kalyar, representing the IRS, filed the petition. It argues that the caretaker government lacks the legal mandate for such major changes, highlighting that the restructuring violates several statutes including the FBR Act 2007 and various tax laws.
The IRS is emphasizing that such major policy decisions should be left to an elected government.
Furthermore, the IRS has raised concerns about the proposed establishment of oversight boards under the new structure, fearing that these may open doors to vested interests and conflicts of interest, especially with the involvement of private sector individuals.
The petition concludes by urging the ECP to prevent the caretaker government from proceeding with the FBR restructuring, asserting that such actions are beyond their mandate and could lead to legislative overreach and potential system collapse.
