The Pakistan Business Council (PBC) has urged the caretaker government to reconsider the structure of tax policy formulation by bringing it under the purview of the Ministry of Planning and incorporating taxpayer representation in the proposed Policy Board as part of the Federal Board of Revenue’s (FBR) restructuring plan.
In a set of recommendations submitted to the government on Sunday, the PBC highlighted the need to separate the role of tax policy from revenue collection, advocating for a more strategic and long-term approach aligned with the nation’s industrial and trade policies outlined in the 5-year plans.
The current amalgamation of fiscal policy and tax collection, according to the PBC, often results in short-sighted revenue-seeking measures that undermine investor confidence and hinder economic growth. By divorcing tax policy from immediate revenue concerns, the PBC believes that policymakers can focus on fostering an environment conducive to business expansion and economic prosperity.
In line with the government’s ambition to leverage artificial intelligence (AI) and technology to broaden the tax base, the PBC emphasised the need for a substantial investment in talent transformation to effectively implement these initiatives.
A key recommendation put forth by the PBC is the inclusion of taxpayer representation in the proposed Policy Board tasked with overseeing the FBR’s restructuring. Expressing concern over the absence of taxpayer input, the PBC stressed the importance of aligning tax policies with objectives such as wealth creation, capital accumulation, investment promotion, and climate resilience. By incorporating diverse perspectives, including those of taxpayers, the Policy Board can generate more holistic and effective policy outcomes.
Moreover, the PBC underscored the significance of setting tax targets that prioritise broadening the tax base over solely focusing on revenue generation. By encouraging a more inclusive approach to taxation, policymakers can stimulate economic activity, foster entrepreneurship, and create a fairer tax system.
As Pakistan navigates its economic landscape, the recommendations put forth by the PBC aim to foster a conducive environment for sustainable growth, ensuring that tax policies are aligned with the nation’s long-term developmental objectives while catering to the needs and perspectives of all stakeholders involved.
