Federal government set to introduce ordinance for FBR reforms

Islamabad (Daily Pakistan Online) The federal government is set to introduce an ordinance this month aimed at reforming the Federal Board of Revenue (FBR). This move is expected to bring about significant changes in the country’s tax administration.

According to sources, the ordinance will introduce long-term reforms, while short-term reforms will be implemented in the first phase. The plan is already underway, with the Prime Minister giving in-principle approval to the draft ordinance.

The proposed plan includes separating customs, making enforcement more effective, and introducing measures for digital invoicing and documentation rules. The scope of taxation will also be widened.

A key aspect of the plan is the establishment of oversight boards, which will select operational heads for Inland Revenue and Customs from the civil service. These boards will also set key indicators to measure performance and review revenue collection and target achievement.

The FBR has undergone significant reforms in the past, including the Tax Administration Reforms Program (TARP) launched in 2005. TARP aimed to increase revenue collection, broaden the tax base, and strengthen audit and enforcement procedures. The program was successfully completed in 2011, with significant improvements in tax administration and revenue collection ¹.