Islamabad: The Ministry of Finance is recruiting six professionals from the market to operationalize the Tax Policy Office (TPO), which will report directly to the finance minister, in line with commitments made with the IMF under the $7 billion Extended Fund Facility (EFF).
On Monday, the ministry sought applications for the positions—one for the director general of TPO and five directors with diverse expertise, including economic analysis, business taxation, personal taxation, international taxation, and direct/indirect taxation.
All of them will be hired on Special Professional Pay Scales (SPPS). The DG will receive SPPS-1, while the directors will be hired on SPPS-II.
Last April, the prime minister approved the revised remuneration structure for four grades of SPPS, involving an all-inclusive package of Rs2 million for SPPS-1, up to Rs1.5 million for SPPS-II, up to Rs1 million for SPPS-III, and up to Rs500,000 per month for SPPS-IV.
After decades of lapses, the government last month took the initial step towards separating tax policy from revenue administration and notified the creation of TPO directly under the Federal Minister for Finance and Revenue, Muhammad Aurangzeb.
The TPO will support the analysis of tax policies and proposals through data modeling, revenue and economic forecasting, as well as the country’s international tax treaties and obligations, the ministry added.
Successive governments, under advice from international lenders, have announced plans to separate the functions of tax policy from tax administration to avoid policy capture by revenue machinery and ensure that the Federal Board of Revenue focuses on revenue collection. However, they have been unable to separate the two functions—tax policy and administration—mainly due to resistance from the FBR.
Under the ongoing $7 billion EFF, Pakistan committed to establishing a TPO under the direct supervision of the finance minister to ensure it had sufficient authority for policy implementation. There has been discomfort within revenue bosses and the ministry’s leadership in policy domains even in recent months.
According to IMF documents, Pakistani authorities committed to “establish a Tax Policy Office under the Minister to improve tax policy analysis and allow the FBR to focus on revenue collection.”
The ministry’s notification stated, “The TPO shall report directly to the Minister for Finance & Revenue. Staffing of the TPO, as approved by the federal cabinet, shall be undertaken with the approval of the Establishment Division and Finance Division on terms and conditions prescribed by the government.”
The finance minister gave a written commitment to the IMF to establish the TPO in the first quarter of fiscal year 2025, “thereby allowing the Federal Board of Revenue (FBR) to sharpen its focus on revenue collection,” but it was delayed to the third quarter and was notified just ahead of the IMF review mission’s visit.
