The Federal Board of Revenue (FBR), Pakistan's main tax administration, has separated its sales tax and federal excise duty (FED) work from its income tax department. In an extraordinary development late on Friday night, the board moved to create a new Member post for sales tax and FED, and from January 2027 taxpayers will deal with separate commissioners for each tax. The move affects how FBR income tax cases will be handled in the field.
What the FBR has done
On Friday, the FBR transferred and posted 54 Inland Revenue Service officials in pay grades BS-17 to BS-21 to the newly created post of Member, Sales Tax & FED (Technical). Dr. Muhammad Sarmad Qureshi, an Inland Revenue Service officer in BS-21, has been appointed to the post, which sits at the FBR headquarters in Islamabad. It is understood that the Board-in-Council of the FBR approved creating the post, and the board's organisational structure has been revised under the new reporting system.
At the time of reporting, the FBR had not notified the separate post of Member, Income Tax (Technical). The arrangement appears to mean that income tax affairs will continue to be handled by the FBR Member Inland Revenue (Operations), while separate sales tax zones will be set up in the field formations.
What changes for taxpayers
From January 2027, taxpayers will deal with separate Commissioners of Sales Tax and Income Tax. A business that deals with all three areas would therefore have to approach three different departments: sales tax, income tax and the Customs Department. Tax experts have described the separation as a setback, arguing that it runs against the reform drive to bring federal and provincial taxes under one roof.
Experts have also raised questions about the reporting lines. They asked whether the Chief Commissioners would report to the FBR Chairman or to the Member Inland Revenue (Operations), and why sales tax would be separated if income tax payers continue to report to that same Member. They warned that the new hybrid model could lead to large-scale shuffling of income tax and sales tax records for the same taxpayers.
What happens next
Tax experts have asked the FBR Chairman to issue a detailed clarification on the powers and functions of the new sales tax and FED Member post, and on the authority that remains with the Member Inland Revenue (Operations). The income tax Member post still needs to be notified. Until both steps are taken, the exact reporting lines will remain unclear for taxpayers, and the change is set to take effect from January 2027.
Aasan alfaaz mein
FBR ne sales tax aur income tax ke mahkme alag karne ka faisla kiya hai. Janwari 2027 se karobari logon ko sales tax aur income tax ke liye alag commissioners se milna hoga. Naya sales tax member post bana hai, lekin income tax member post ka notification abhi nahi hua. Aap ke liye iska matlab hai ke tax ke kaam ke liye zyada dafter jane ki zaroorat ho sakti hai.
