Give FBR more than a new name

The federal government is again considering whether Pakistan needs a new tax collection agency. According to a report in The Express Tribune of Oct 16, 2026, the FBR has been asked to present proposals for human-resource reform, revamping and restructuring to the PM by October 19, 2026, while the creation of an altogether new organisation is also under discussion. The urgency is understandable: against this year's Rs15.263 trillion target, officials, as per the report, already fear a shortfall exceeding Rs650 billion.

The danger is equally familiar. Pakistan may abolish FBR in name and recreate it in substance. The late Dr Pervez Tahir saw the problem clearly. In 2019, first in "FBR: the end is nigh" [The Express Tribune, March 15, 2019] and later in his memorable "Giving FBR a decent burial" [The Express Tribune, November 8, 2019], he argued that repeated restructuring had failed.

Dr Pervez (called 'PT' affectionately by his friends) explained that the organisation itself embodied what he called "Revenuecracy": a system geared towards extracting readily collectible revenue rather than building an equitable tax system. He proposed one professional tax-collection agency for federal, provincial and local taxes, separated from tax-policy formulation, institutionally autonomous and placed within a federal framework involving the provinces.

This scribe has been arguing along similar lines for decades. The idea of a federal National Tax Agency or Pakistan Revenue Authority - replacing the fragmented collection through the FBR and multiple provincial bodies - has been repeatedly proposed in books and articles. The objective is one taxpayer interface, one return where practicable, integrated databases, harmonised administration and professionally managed collection removing multiple costs, while elected governments and legislatures determine tax policy. That distinction is crucial.

Pakistan increasingly confuses tax policy with revenue collection. A rational policy asks who should pay, according to ability, and what tax structure best promotes investment, employment and fairness. Revenuecracy asks from whom money can be collected fastest.

The salaried class, incorporated businesses, importers, exporters, bank depositors, electricity consumers and telecom users are easy to reach. Politically influential and undertaxed sectors remain harder to confront. Mere changing FBR's letterhead will not cure this. Nor will throwing more borrowed money at "transformation" (sic).

Another $200 million foreign-funded programme was approved only last month, purportedly taking external financing for tax-system modernisation over the years to nearly $5 billion. Meanwhile, FBR's tax-to-GDP ratio remains around 10.3%, the previous annual target was missed by more than Rs1.1 trillion, and the latest traders' scheme has produced derisory results.

Technology is necessary. Faceless assessment, digital invoicing, production monitoring and intelligent risk selection can reduce discretion. They cannot substitute for institutional design.

A genuinely new agency should satisfy at least four tests. Tax policy must be separated from tax collection and placed under a representative, professionally staffed policy institution accountable to Parliament, not an administrative unit in the Ministry of Finance, as is the case today.

Collection should progressively become a single-window operation covering federal and provincial taxes through constitutional agreement. The new body must recruit and promote professionals on competence rather than reproduce existing service hierarchies. It must be judged not simply by gross collection, but by voluntary compliance, refund performance, quality of assessments, cost of collection and reduction in litigation.

Existing officers should be free to compete for positions on merit. The old cadres should not automatically migrate en bloc into the new institution, otherwise institutional culture will migrate with them.

Dr Pervez called for giving FBR a decent burial seven years ago. The government now appears closer than ever to accepting his diagnosis. It should also heed his warning. Pakistan does not need FBR-II. It needs a new relationship between taxpayer and State. Renaming Revenuecracy would merely postpone the funeral.