Islamabad, February 15, 2025: The government has officially withdrawn the Federal Board of Revenue’s (FBR) authority over tax policymaking, fulfilling a key condition set by the International Monetary Fund (IMF). Moving forward, the FBR will focus solely on tax collection, while tax policy decisions will be overseen by Finance Minister Muhammad Aurangzeb.
To implement this transition, the government has established a Tax Policy Office (TPO) under the Ministry of Finance and Revenue. The newly formed office will be responsible for analyzing tax proposals, reviewing reforms, and ensuring policy autonomy, as previously assured to the IMF. The restructuring aims to minimize tax fraud, plug loopholes in the system, and enhance revenue collection efficiency.
The IMF had urged Pakistan to separate tax policymaking from its enforcement arm, citing the need for greater transparency and efficiency. While Finance Minister Aurangzeb had committed to establishing the TPO in early fiscal year 2025, delays had postponed its launch. However, the office was finally set up just before the IMF team’s visit to review Pakistan’s economic program.
The move is expected to streamline the tax system, strengthen policy reforms, and improve government revenue generation while ensuring compliance with global financial obligations.
