Islamabad: The federal government plans to amend the Federal Board of Revenue (FBR) Act, 2007 through the upcoming Finance Act 2026 to formally transfer tax policy functions from the Federal Board of Revenue (FBR) to a newly established Tax Policy Office within the Ministry of Finance.
Finance Minister Muhammad Aurangzeb informed the Senate Standing Committee on Finance on Wednesday that the proposed legislative changes would shift the responsibilities of the FBR’s Tax Policy Board to the finance ministry, separating tax policy formulation from tax collection and administration.
According to the minister, the government has already established a Tax Policy Office in the Ministry of Finance to independently analyse fiscal matters and develop taxation policies. Under the proposed amendments, Section 6 of the FBR Act, which deals with the FBR Policy Board, will be removed along with related provisions, as the board would no longer be required.
FBR Chairman Rashid Mahmood Langrial told the committee that the tax policy function has already been transferred from the FBR to the Tax Policy Office. He said the office would prepare tax proposals for the federal budget for fiscal year 2026–27, while the FBR would continue to handle operational and administrative responsibilities related to tax collection.
Langrial added that amendments to the FBR Act and the Rules of Business would be required to grant the Tax Policy Office full authority to manage tax policy matters.
During the meeting, Senator Talha Mahmood questioned the move, saying tax policy formulation was a technical function that should remain under the FBR. He also raised concerns about the perception of the tax authority among businesses and called for greater accountability within the tax administration.
Responding to the concerns, Aurangzeb said the government was committed to addressing misconduct within the tax system and noted that all civil servants, including FBR officials, are required to declare their assets.
Langrial also informed the committee that another proposed amendment to the FBR Act would authorise the secretary of the Revenue Division to appoint FBR members through transfers and postings of officers in grade 21 and above.
He said the change is intended to remove administrative ambiguities and ensure continuity in the tax administration. The authority to appoint the FBR chairman and members will remain with the federal government, while the revenue secretary will be empowered to make internal appointments from senior officers placed at the disposal of the FBR.
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