New tax agency under consideration

The government is weighing a new tax collection agency or a further overhaul of the existing revenue machinery, the Express Tribune reported. The idea was raised at a top-level meeting last Saturday, and officials say deliberations have since got under way. The FBR will submit human resource reform and restructuring proposals to Prime Minister Shehbaz Sharif on October 19.

The FBR has called its reform a continuing process and rejected reports that revenue collection could be handed to a private company, calling such talk totally baseless. Sources described the discussions as being at an early stage, with no firm proposal yet on how the FBR or a revenue agency will be shaped. Shifting the board's powers would require changing several laws, including the FBR Act 2007, plus at least four tax statutes.

The FBR's tax-to-GDP ratio stood at 10.3% in the previous fiscal year, and the board fell short of its initial yearly goal by more than Rs1.1 trillion. The Rs15.263 trillion target for this year calls for growth above 17%, while the FBR beat its first-quarter goal but has grown by hardly 7%. Sources project growth near 12%, which would leave collection more than Rs650 billion below target.