In a major policy shift, Finance Minister Muhammad Aurangzeb announced that the Federal Board of Revenue (FBR) will no longer be responsible for preparing Pakistan’s federal budget. The Tax Policy Office, which was previously under the FBR, has now been moved to the Finance Division.
The finance minister made the statement during a workshop titled “Unlocking Capital Market Potential for Banks.” He confirmed that the upcoming federal budget for FY2026–27 will be prepared by the Finance and Tax Policy Office, not the FBR.
This change is part of broader reforms aimed at improving transparency and streamlining financial planning. The minister emphasized that the new structure would help in making independent tax policies aligned with the country’s economic goals.
Aurangzeb said the government is also finalizing an industrial policy to boost local production. He highlighted ongoing efforts in tariff reforms, particularly for the export sector. The goal is to reduce customs, regulatory, and additional duties over the next five years.
The finance minister stressed that these reforms are homegrown and not dictated by the International Monetary Fund (IMF). Institutions like the World Bank have supported the development of these plans. However, he acknowledged some resistance within the FBR and Finance Ministry due to concerns over revenue loss.
Still, Aurangzeb urged officials to adopt a long-term vision. He said lowering tariffs will help make Pakistani industries more competitive globally.
He also proposed creating a Capital Market Development Council. The council would include the SECP, State Bank, PBA, and representatives from provinces and private sectors to promote domestic funding through capital markets like the PSX.
With the FBR now focused solely on tax collection, this separation of policy and implementation is seen as a step toward modernizing Pakistan’s fiscal system.
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