THE announcement by Finance Minister Muhammad Aurangzeb that the preparation of the federal budget will now be led by the Finance Division, in coordination with the newly created Tax Policy Office (TPO), marks a significant structural shift in economic management.
This move effectively ends the FBR’s long-standing role in tax policymaking, confining it to tax collection and enforcement.
From a governance and reform perspective, this change aligns with international best practices. Separating tax policy from tax administration is a well-recognized principle that allows for more objective, data-driven and economically sound decision-making. By housing the TPO within the Finance Division and placing it directly under the oversight of the Finance Minister, the government aims to enhance policy coherence, strengthen forecasting capability and introduce more transparency into the budget-making process. However, for the average citizen, this administrative reshuffle is of little consequence. People are not concerned about whether the budget is being drafted by the FBR, the Finance Division or any other institution. What truly matters to them is what the budget delivers—relief from inflation, employment opportunities, better public services and a sense of economic security. The credibility and effectiveness of any budget lie not in its origin, but in its orientation. Unfortunately, too often budgets have been numbers exercises, disconnected from the lived realities of the people. That must change. If the government is serious about making the budget an instrument of economic justice and inclusive growth, it must ensure that the voice of the people is heard in its formulation. To that end, elected representatives—who are most directly aware of their constituents’ problems—must be brought into the budget-making process well before the budget is finalized. It is imperative that sessions of both houses of Parliament be held specifically for pre-budget discussions. These sessions should be substantive, not ceremonial, with members of the National Assembly and Senate offering meaningful input. That input must then be reflected in the final document. The new budgeting structure can be a step forward—only if it becomes more inclusive, transparent and responsive to the people it is meant to serve.
