ISLAMABAD: Pakistan has launched a new Tax Policy Office (TPO) to overhaul how the country designs and manages its revenue system, meeting a key International Monetary Fund (IMF) reform target.
The move separates tax policy from the tax collection agency — the Federal Board of Revenue (FBR) — in an effort to modernize fiscal governance, attract investor confidence, and strengthen compliance under Pakistan’s $7 billion IMF program.
The establishment of the TPO is a move long-sought by the International Monetary Fund (IMF) as part of its structural framework conditionalities.
According to the official notification, the government has appointed Dr Najeeb Ahmed Memon, a senior tax policy specialist, as the first Director General of the new office.
The TPO will operate directly under the Finance Minister and serve as the government’s analytical and advisory arm on revenue policy, fiscal modelling, and international tax treaties.
“The responsibilities and structure of the TPO may be amended as deemed necessary for its optimal functioning with the approval of the Federal Cabinet,” the Finance Division said in its notification.
Officials familiar with the transition told Arab News Pakistan that the initiative aims to strengthen evidence-based policymaking and reduce the FBR’s dual role as both policymaker and collector. “The IMF has consistently advised Pakistan to create an autonomous policy unit distinct from the FBR’s operational structure,” one official said.
Originally notified in February 2025, the TPO had remained inactive pending the appointment of its leadership. The new office will now spearhead tax policy preparation for the 2026-27 federal budget, with multiple directors appointed to oversee direct, indirect, business, and international taxation.
Dr Memon brings over two decades of experience in tax law, policy, and international consultancy. His previous work includes assignments with the World Bank, GIZ, HM Revenue & Customs (UK), and Tax Inspectors Without Borders.
Economists quoted by different media outlets stated the reform fulfils a long-standing IMF demand and could help rationalise Pakistan’s complex tax regime. “Separating policy from administration is a structural necessity,” an analyst told Business Recorder, adding that the reform’s success will depend on “institutional continuity and data capacity within the Finance Division.”
The IMF, in its most recent review, had described this separation as critical to “widening the tax base and minimising arbitrary exemptions.”
