ISLAMABAD: The cabinet’s Economic Coordination Committee (ECC) on Tuesday adopted five suggestions to restructure the Federal Board of Revenue (FBR) at an estimated cost of Rs25 billion, with the goal of closing a staggering revenue shortfall of over Rs6 trillion.
A technical supplemental grant for the Pakistan Post Office Department and the Election Commission of Pakistan (ECP) to conduct local body elections in provinces and the federal capital was also authorized during the ECC meeting, which was presided over by Finance Minister Muhammad Aurangzeb.
The FBR chief, Rashid Mahmood Langrial, and his reform team have developed a transformation plan to reduce the Rs6 trillion revenue shortfall, of which Rs3.5 trillion is associated with sales tax. Prime Minister Shehbaz Sharif had already approved five of the suggestions.
According to a formal release, the ECC gave its approval in principle to all five of the FBR’s suggestions, with the caveat that a third-party impact assessment of the suggested procedures be carried out prior to the next budget.
Five proposals are approved with a requirement for a third-party impact assessment.
It was also agreed that by the end of 2025, a similar impact review of the results to be developed under the proposals would be conducted in order to assess the overall value of the exercise and its influence on the overarching objective of increased income generation and resource mobilization.
The ECC also agreed that a conversation between the Finance and Revenue Divisions would be held to develop a plan for implementation, including budgetary allocation.
Digital enforcement stations will be installed on 24 Indus and Hub bridges as part of an anti-smuggling campaign. In Balochistan, ten choke points would be established. Every gas station will have a digital connection, and specialized customs enforcement facilities will be set up nationwide.
It was determined to offer mobility vehicles at the AC and DC levels that would be available for operational use in order to improve tax compliance and close tax gaps. Last year, as part of a track-and-trace operation for tobacco monitoring, a dedicated fleet was deployed, resulting in 308 raids and the recovery of Rs1 billion.
This year, this fleet carried out 611 raids, recovering Rs3 billion.
Simultaneously, it was determined to give tax officers in A-grade four basic wages, three for B-grade, two for C-grade, and no incentive for E-grade.
The goal of the incentives is to encourage officers to increase their tax compliance. Additionally, housing alternatives in cities like Karachi and Lahore would be provided to tax officials.
It was also suggested to offer foreign certifications and IBA degrees to help tax officers advance their careers.
The Ministry of Communications’ proposal for a technical supplemental grant totaling Rs16.995 billion to settle verified pending liabilities of Pakistan Post Office Department agencies and companies was accepted by the ECC.
The Election Commission’s report for a TSG of Rs1.317 billion in relation to local government by-elections in the four provinces and the federal capital during the current fiscal year (2024–25) was accepted by the ECC.
The State Bank governor, the FBR chairman, federal secretaries, Industries Minister Rana Tanveer Hussain, Power Minister Sardar Awais Ahmad Khan Leghari, Commerce Minister Jam Kamal, and Minister of State for Finance Ali Pervaiz Malik were among those present at the meeting.
