The Federal Board of Revenue (FBR) has separated its sales tax/federal excise duty (FED) and income tax departments, with taxpayers set to deal with separate Commissioners from January 2027.
According to media reports, the FBR transferred and posted 54 Inland Revenue officials, from BS-17 to BS-21, to the newly created post of Member, Sales Tax & FED (Technical).
Dr. Muhammad Sarmad Qureshi (Inland Revenue Service/BS-21) has been appointed to the post. The FBR’s Board-in-Council had approved the creation of the position, and the organisational structure has been revised under the new reporting system.
The FBR has not notified a corresponding post of Member, Income Tax (Technical) as of the filing of this story. Income tax affairs are therefore expected to remain with the FBR Member Inland Revenue (Operations), while separate sales tax zones are to be created in the field formations.
Under the new arrangement, businesses will deal with separate departments for sales tax, income tax and customs. Cases of income tax and sales tax are expected to be reshuffled, and the records of taxpayers for the two taxes are likely to be separated in field formations.
Tax experts told media that it remains unclear whether the Chief Commissioners will report to the FBR Chairman or to the Member IR (Operations). They also questioned the rationale for separating sales tax from income tax if income taxpayers continue to report to the Member IR (Operations).
The experts said the move runs counter to the integration and harmonisation of taxes being pursued by the federation and the provinces. They have asked the FBR Chairman to issue a detailed clarification on the powers and functions of the new post and the remaining jurisdiction of the Member IR (Operations).
