The Federal Board of Revenue (FBR) has proposed creation of a 'Tax Policy Formulation Cell' in Inland Revenue (IR) Wing to assist the budget makers in tax policy matters during preparation of Federal Budget every year.
Sources told Business Recorder here on Sunday that the FBR IR Wing has proposed creation of Tax Policy Formulation Cell under the supervision of Member (Tax Policy/Fiscal Research) in IR Wing. The main purpose for establishment of cell is to extend full support to the budget making team during preparation of Federal Budget. At present each FBR Wing has tax policy/budget sections to deal with the issues of tax policy of sales tax, income tax, customs duty and federal excise duty. However, there is no 'Tax Policy Formulation Cell' in the FBR House to exclusively facilitate the budget makers in finalisation of tax policy at the time of preparation of federal budget.
The establishment of 'Tax Policy Formulation Cell' in IR Wing would be instrumental in giving feedback on budgetary proposals of sales tax, income tax and federal excise duty.
In this connection, the FBR is expected to propose hiring of an individual consultant for carrying out a study on the issue with the financial assistance of a donor agency.
The establishment of 'Tax Policy Formulation Cell' is a part of the overall work plan and list of activities/studies to be carried out through funding of a donor agency. The study on the said cell would be supported by the donor agency.
When contacted, a tax expert was of the view that there is a need to create a Tax Policy Formulation Cell to take major tax-related decisions pertaining to sales tax and income tax through a well-organized and institutionalised tax policy unit within Inland Revenue Wing of the Board. Such Cell can propose long-term, medium-term and short-term tax policy strategy throughout the year. Beside senior tax officials, the Cell may comprise Tax Policy Advisor; Tax Policy Expert; Sector/Trade specialists; Fiscal Economist; Fiscal statistician and Legal expert etc.