A few weeks ago the debate was whether to replace the Federal Board of Revenue with an entirely new body. The government has now abandoned that idea, but the news is not comfortable for FBR officers. The federal government on Monday dropped plans for a new tax agency and decided instead to compulsorily retire non-performing officers by amending the Civil Servants Act, The Express Tribune reported.
PM: reforms will continue regardless
Chairing a high-level review meeting, Prime Minister Shehbaz Sharif directed that FBR reforms be accelerated, saying early results were encouraging. According to a statement from the Prime Minister's Office, he said it was the responsibility of FBR officers to meet the nation's expectations and that the reform process would continue in any case.
He called for indiscriminate action against corrupt elements in the department, while saying staff who genuinely improved their conduct and performance should be given a chance.
Officials told the meeting that the reforms had narrowed the estimated tax gap from 6% to 5% of GDP and that technology had substantially reduced officials' discretionary powers. The FBR was told to submit a report on restructuring its human resources to the prime minister this week.
What changes in the Civil Servants Act
According to the paper, amendments to the Civil Servants Act have been pending before the National Assembly since 2024, and the government has now decided to fast-track them. Proposed new clauses 22A and 22B, applicable to all service groups, would let the government restructure any division or department, abolish posts and declare officers surplus.
Such officers would be offered a severance package they would be obliged to accept, with an appeal allowed only against its monetary value. The draft says no law, contract or court judgment would limit this power.
A clash with the officers' association
The decision follows a threat by the Inland Revenue Service Officers Association to hold a pen-down strike after the new-agency idea surfaced; the threat was later withdrawn. Officials told The Express Tribune the prime minister was displeased and said there was no room for an association that could blackmail the government.
An FBR statement later said two Inland Revenue Service officers, one in BS-20 and one in BS-19, had been suspended and two other BS-20 officers recalled to FBR headquarters for investigation over an unauthorised press statement and a call to halt official work.