ISLAMABAD: Moving well past its original June deadline for completing the rightsizing of the federal government, the Cabinet Committee on Rightsizing (CCR) on Tuesday turned its attention to reforming the Federal Board of Revenue (FBR), describing it as “at the core of Pakistan’s fiscal architecture”.

The meeting, chaired by Finance Minister Muhammad Aurangzeb, reviewed the status of various ministries and divisions, including the Power Planning and Monitoring Company (PPMC), the Ministry of Law, and the Revenue Division (FBR). The finance minister had earlier announced in January that the rightsizing of all 42 federal ministries and their attached entities would be completed before the end of FY25 to improve efficiency and reduce expenditures.

He had also announced that the finance ministry would have live visibility on cash balances of all the ministries and divisions to ensure that decisions regarding the abolition of posts, outsourcing of menial services and reduction in contingent staff were implemented by all the ministries because these entities and ministries had an approved budget allocation of about Rs840 billion in FY25, and if this figure did not appear lower next year, it would indicate a failure.

While the impact of the rightsizing exercise was not separately identified in the federal budget FY26, the expenditure allocation for running of the civil government increased to Rs971bn, from Rs839bn budget allocation in FY25. Additionally, the rightsizing exercise for all 42-43 ministries, divisions, and their subordinate entities and corporate bodies could not be completed by June 30, as targeted. The CCR is currently in the process of writing letters to various ministries and their entities to provide information on their roles, performance, and outcomes, justifying their operations, potential closure, or downsizing.

The meeting of the CCR considered a set of recommendations submitted by the Sub-Committee on Rightsizing led by Salman Ahmad, Ambassador-at-Large, pertaining to the organisational framework of the Revenue Division. The proposals outlined a broad approach to institutional reform aimed at enhancing structural efficiency, optimising human resource deployment, and strengthening alignment with overarching national objectives.

“Emphasis was placed on promoting a results-oriented governance model through improved performance management systems and the adoption of accoun­tability mechanisms to support more effective and responsive public service delivery”, said an official statement.

The finance minister reminded the participants that the FBR stands at the core of Pakistan’s fiscal architecture and the government remains fully committed to implementing the FBR transformation plan approved by the prime minister to raise the tax-to-GDP ratio and transform FBR into a modern, efficient, and accountable revenue authority that is essential to fiscal sustainability.

Published in Dawn, July 9th, 2025