Govt Transfers Tax Policy Role to Finance Division

The federal government has introduced amendments to the Rules of Business, 1973, reassigning tax policy responsibilities from the Federal Board of Revenue (FBR) to the Finance Division, where these functions will now be carried out by the newly constituted Tax Policy Office (TPO), as reported by Business Recorder.

Under the updated structure, the TPO has been mandated to formulate tax proposals for the federal budget 2026–27, including the preparation of the Finance Bill encompassing income tax, sales tax, and federal excise duty.

These amendments were formally notified by the Cabinet Division through SRO 687(I)/2026 dated April 24, 2026. The revisions include the insertion of a new sub-clause in Schedule-II, officially placing the TPO within the Finance Division and assigning it comprehensive tax policy responsibilities.

According to officials, the restructuring establishes a clear distinction between policy formulation and tax administration, with the TPO overseeing policy development, while the FBR will continue to handle execution, enforcement, and administrative operations.

Sources further indicated that the establishment of the TPO effectively renders the existing Policy Board obsolete, as all tax policy functions are now consolidated under the Finance Division.

The amendments also bring the Strategic Digital Wallet Company under the administrative jurisdiction of the Finance Division.

Additionally, the Pakistan Information Commission has been reassigned to the Information and Broadcasting Division. The revised rules now require all government divisions to respond to inter-departmental queries within three working days.

Furthermore, any summary submitted to the Cabinet Division proposing amendments to laws or rules must now include a comparative statement detailing both existing and proposed provisions.

Officials noted that the objective of this restructuring is to reinforce the institutional mechanism for tax policy formulation in preparation for the upcoming federal budget cycle.