PESHAWAR: Finance and Revenue Minister Muhammad Aurangzeb reaffirmed the government’s commitment to reforming the Federal Board of Revenue (FBR) on Wednesday, highlighting efforts to minimize human involvement in tax collection.
“Reducing human intervention will lead to less leakage—a subtle way of addressing corruption,” he stated while speaking to the business community in Peshawar.
The minister emphasized a key structural reform—transferring tax policy from the FBR to the Ministry of Finance. This change, implemented in February to align with International Monetary Fund (IMF) requirements, led to the establishment of the Tax Policy Office (TPO), which will operate under the finance ministry.
The policy division’s shift from FBR operations to the finance ministry is a gradual process, expected to be fully effective by the next fiscal year (2025-26). According to an official notification, the TPO will support tax policy analysis through data modeling, revenue forecasting, and oversight of international tax agreements. The office will directly report to the finance minister, with staffing decisions approved by the Establishment and Finance Divisions.
Speaking at the Peshawar Chamber of Commerce, Aurangzeb noted positive economic indicators resulting from government initiatives and reiterated a commitment to incorporating business community input in the upcoming budget. He assured ongoing support to all provinces and sectors.
Regarding government expenditure, Aurangzeb confirmed plans to shut down additional departments as part of an IMF-backed “rightsizing” initiative aimed at optimizing state functions and reducing costs. “We are making efforts to curtail expenditures by eliminating redundant departments,” he explained.
The federal government has launched a restructuring program, dissolving various ministries and associated bodies to enhance efficiency. In January, Aurangzeb pledged to streamline 42 ministries and approximately 400 affiliated departments by June 30, with plans to halve 80 institutions.
Additionally, 60% of vacant government posts—approximately 150,000 positions—have been abolished or designated as non-essential, yielding substantial financial savings. A recent example of these reforms includes the dissolution of the Ministry of Aviation, which was merged into the Ministry of Defence, saving an estimated Rs145 million annually.
Meeting with KP’s Finance Adviser
Separately, Aurangzeb met with Khyber Pakhtunkhwa’s Finance Adviser, Muzzammil Aslam, in Peshawar. Minister of State for Finance Ali Pervez Malik, KP Excise Minister Khaleeq ur Rahman, and KP Chief Secretary Shahab Ali Shah also attended the meeting.
During the discussions, Aurangzeb commended the KP government for implementing the National Fiscal Pact and Agricultural Income Tax. He assured provincial authorities that their concerns regarding the National Finance Commission (NFC) Award would be reviewed, emphasizing the federal government’s intent to collaborate with all provinces.
Aslam raised concerns about halted federal funding for merged districts under the Accelerated Implementation Programme (AIP) and Annual Development Programme (ADP). “These districts were allocated Rs66 billion in the current budget, but expenditures have reached Rs104 billion,” he stated.
He urged the federal government to implement interim financial measures under the NFC award to cover the shortfall and called for proactive engagement with provinces on budgetary matters, tax enforcement, and salary and pension concerns.
The meeting underscored the necessity of aligning federal and provincial policies to address financial challenges effectively.
