Federal Board of Revenue eyes new performance metrics

ISLAMABAD: In a major shift from past practice, the Federal Board of Revenue (FBR) is considering replacing monthly tax collection targets with a fiscal-year-based performance evaluation system for its field formations, aiming to reduce pressure to chase short-term revenue targets and to focus on annual collection outcomes, informed sources told Dawn. The proposal is being discussed as part of a broader restructuring of tax administration following sweeping changes introduced through the Finance Act 2026-27. The reforms seek to transform tax enforcement by reducing human interaction and introducing centralised, technology-driven assessment and audit functions from Islamabad, while field offices remain primarily responsible for revenue collection. The move reflects growing recognition within the tax administration that monthly collection targets often distort performance assessments because revenue flows are influenced by factors such as refunds, import cycles, advance tax payments and court decisions, many of which are beyond the control of field officers. The proposal also follows a wider redistribution of responsibilities within the federal government. Tax policy formulation has already been separated from the FBR and transferred to the Tax Policy Office in the Ministry of Finance, while tariff policy now falls under the Tariff Policy Board in the Ministry of Commerce. As a result, enforcement and revenue collection remain the FBR’s principal functions. Annual tax effort, compliance to replace monthly checks Official sources said the proposal comes amid renewed scrutiny of the practice of judging the FBR’s performance against monthly revenue targets. The officials argue that these targets are not pure forecasts but are linked to budget financing requirements and commitments made under the International Monetary Fund programme. According to tax officials, annual revenue targets approved by parliament are driven by the government’s fiscal needs rather than solely by