ISLAMABAD: The FBR Policy Board on Thursday started formal deliberations over the proposed tax policies and suggested a string of measures to explore avenues for broadening of the narrow tax base.

One of the major issues that came under discussion was the 17 per cent sales tax and there was a consensus among the top cabinet members to slash it up to 10pc, a well-placed source privy to the meeting told Dawn.

The sources said that the issue needs an in-depth analysis as in past the proposal came up for consideration but dropped on the fear that it will dent revenue collection.

The government claims that a new set up is being established for the tax policy formulation and the FBR would only confine to implementation. However, this remains only on papers.

The policy power regarding sales tax, federal excise duty, and income tax is still with the Inland Revenue Department of FBR, while the tariff power was transferred from Customs to the Tariff Policy Board constituted under the supervision of the commerce minister.

According to the source, the issue of separation of policy formation of IRS and administration was also discussed during the meeting but no clear deadline or decision was made in this regard.

An official statement issued after the meeting said that there was an extensive discussion on the task assigned to a sub-committee which included pared by the Minister for Industries and Production Hammad Azhar and Faiz Ullah Kamoka for designing a mechanism of data sharing between FBR and National Data and Registration Authority (Nadra).

Adviser Finance Hafeez Shaikh reiterated the need to broaden the tax net through the use of data, already available with the FBR, without burdening the existing taxpayers and advised Special Assistant to PM on Revenue Dr Waqar Masood Khan to formulate a proposal for liaison between Nadra and FBR for data analysis to fulfil the requirements of FBR and ensure all stakeholders are on board.

The meeting was informed that the situation is back to normal at the Torkham border as the number of stuck up containers fell to 2,000 from 10,000 after special measures taken to clear the backlog.

The third meeting of the Policy Board was held to review the terms of reference (ToRs) of the FBR Policy Board.

After the approval of the minutes of the previous meeting, the members proceeded with the discussion on the proposed ToRs of the Policy Board which was prepared by Hammad Azhar and Abdullah Yousaf, former chairman FBR.

The subcommittee presented the proposed ToRs before Policy Board for discussion. The members of the board gave their valuable input to fine-tune the same.

On the proposed ToRs, the adviser after a detailed discussion with all the members of the board gave certain guidelines to refine the proposed ToRs under the supervision of Dr Waqar Masood Khan, added the announcement.

Published in Dawn, October 23rd, 2020