ISLAMABAD: The federal government withdraws important powers from the Federal Board of Revenue (FBR) on the demand of the International Monetary Fund (IMF).
The Federal Cabinet has set up a tax policy office in the Finance Ministry, which has also been issued a notification.
According to the notification, Ministry of Finance has established a Tax Policy Office, separating tax policy formulation from tax collection. The FBR will now be limited to tax collection only and policy-making will fall under the Ministry of Finance.
According to the notification, the tax policy office will directly report to Federal Minister Finance and Revenue. The tax policy office will work to create a government reform agenda, the tax policy office will analyze tax policies and suggestions.
The notification states that tax policies and suggestions will be analyzed through data modeling, revenue, economic forecasting.
According to sources, this was the long -standing demand of the International Monetary Fund(IMF) and the IMF was assured to keep the tax policy making and recovery process independent.
In order to reduce tax fraud, the implementation of the flaws will be focused on the implementation of the tax.
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Sources say that the tax policy office will start work from next financial year, while the notification does not listen to when the tax policy office will be transferred to the finance ministry, but sources are showing the possibility of implementing it by next fiscal year.
