FBR Separates Sales Tax and Federal Excise Duty From Income Tax in Major Restructuring

The Federal Board of Revenue (FBR) has moved forward with a significant internal restructuring by separating the administration of sales tax and Federal Excise Duty (FED) from income tax. As part of the change, 54 Inland Revenue officers have been transferred and posted to a newly created wing, according to an official notification issued on Friday.

The board has established the position of Member, Sales Tax & FED (Technical) at its headquarters in Islamabad. Dr. Muhammad Sarmad Qureshi, a Grade-21 officer of the Inland Revenue Service (IRS), has been appointed to lead the new wing. The officers posted to the setup range from BS-17 to BS-21 grades.

Sources indicate that the FBR has prepared a phased plan for the separation, which is intended to give sales tax and FED their own administrative structure, complete with dedicated officers and field formations. The board's Board-in-Council has already approved the new Member post, and the organization's structure has been revised under a new reporting system.

Notably, the FBR has not yet notified a post of Member, Income Tax (Technical). As a result, income tax matters for taxpayers will continue to be handled by the Member Inland Revenue (Operations) and the existing income tax setup. Separate sales tax zones are expected to be created within field formations as the restructuring progresses.

The move is part of broader efforts to streamline tax administration in Pakistan and improve the efficiency of revenue collection. The phased approach suggests further changes may follow as the new wing becomes fully operational.