ISLAMABAD: The fate of the Federal Board of Revenue’s (FBR) chairman hangs in the balance in the wake of a change in government, with reports swirling in the capital that he could be replaced or get an extension in the next few days.

FBR Chairman Ashfaq Ahmed was elevated to the post on Aug 25, 2021 by the previous government, replacing Asim Ahmad after a cyberattack on taxpayers’ data. Mr Ashfaq is in BPS-21 of the Inland Revenue Service (IRS).

Soon after taking oath earlier this month, Prime Minister Shehbaz Sharif held a one-on-one meeting with Mr Ashfaq. However, no official word is available about the meeting.

An official source told Dawn that the fate of the incumbent FBR chairman would be decided soon after the return of Finance Minister Miftah Ismail, who is in Washington to discuss measures with the International Monetary Fund (IMF) to resume the loan programme.

Reports suggest Ashfaq Ahmed may be replaced or get extension early next week

These measures, according to the source, included revenue measures, especially a revision in personal income tax rates and withdrawal of tax exemptions in the next budget.

As part of the IMF programme, the FBR already imposed over Rs350 billion in taxes in January this year.

According to the source, a decision on replacing or retaining the FBR chairman would be taken early next week.

With the change in government, senior officers from the tax groups are in the run for the top slot. At the same time, the names of officers being considered for the FBR’s top slot included three officers from the IRS — Asim Ahmed, Nadeem Rizvi and Tariq Pasha — one from the Customs, i.e. Tariq Huda.

Mr Pasha is closely connected with the PML-N, which can be a deciding factor. He has worked in various capacities, including the Punjab finance secretary, and is a close confidant of former finance minister Ishaq Dar.

Soon after Mr Sharif took office, Mr Pasha was also invited to the government’s first meeting on the economy.

However, there is also a possibility that the government may appoint an officer of the Pakistan Administrative Services as the new FBR head.

Revenue collection

The FBR collected Rs4.382 trillion in the first nine months (July to March) of the current fiscal year, Rs248bn higher than the target and growing around 30pc year-on-year.

This growth was achieved even though sales tax on all petroleum products has been reduced to zero for the first time in the country’s history, costing the tax body Rs45bn in March alone.

Former prime minister Imran Khan announced a cut in petrol and electricity prices despite a steep rise in the global oil market, pledging to freeze the new rates until the next budget in June. He said FBR’s revenue collection was exceeding the targets. In public rallies, he has repeatedly talked about the FBR’s performance.

Likewise, the revenue impact of sales tax exemptions provided to fertilisers, pesticides, tractors, vehicles, and oil and ghee have come in at Rs18bn per month.

The growth in revenue will provide a cushion to the incumbent government for subsidising petroleum prices, reducing electricity rates and incentivising the IT sector and industries.

However, the IMF is asking Pakistan to end subsidies on petroleum products in order to resume the loan programme.

Published in Dawn, April 24th, 2022