Major Reshuffle in FBR Ahead of FY26 Budget: Key Changes to Boost Revenue Collection

A major reshuffle in the Federal Board of Revenue (FBR) is on the cards as Pakistan gears up for the presentation of the fiscal year 2025-26 (FY26) budget. This sweeping administrative overhaul is expected to be carried out in the coming weeks and is likely to impact several key positions within the tax machinery. The aim is to align the FBR’s leadership and operational framework with the government’s broader fiscal objectives, particularly in the context of a challenging economic environment and potential negotiations with the International Monetary Fund (IMF) for a new long-term loan program.

Sources within the Ministry of Finance indicate that the reshuffle will focus on bringing in officers with a proven track record of performance and integrity. The move comes at a time when the government is under immense pressure to enhance revenue collection, broaden the tax base, and digitize the tax system. The FBR has consistently missed its ambitious revenue targets in recent years, largely due to systemic inefficiencies, administrative weaknesses, and a large informal economy. With a new budget cycle approaching, the government is keen to revamp the institution’s leadership to inject momentum into ongoing reforms.

Among the key posts likely to see changes are Members of Inland Revenue Operations, Customs, and Policy as well as Chief Commissioners in large taxpayer units (LTUs) and Regional Tax Offices (RTOs). These positions are crucial in driving both policy formulation and field enforcement. The reshuffle is also expected to affect officers at the middle management level, especially those working on automation projects, audits, and enforcement drives. Insiders suggest that the federal government may consult external advisors and take input from international donors such as the IMF and World Bank when finalizing the appointments.

The reshuffle aligns with the FBR’s internal restructuring plan, which is aimed at converting the Board into a more autonomous, accountable, and efficient organization. One of the central elements of the FBR’s reform agenda is the establishment of a Pakistan Revenue Authority (PRA) to replace the current FBR structure. Although the PRA plan remains at a conceptual stage, the leadership transition is seen as a preparatory step in that direction. Senior government officials argue that without credible and competent individuals in key roles, any structural change will fall short of its objectives.

One of the major drivers of this reshuffle is the upcoming FY26 budget, which is expected to feature a raft of new tax measures. With limited fiscal space and a need to reduce the budget deficit, the government plans to increase reliance on domestic revenue mobilization. This includes removing tax exemptions, rationalizing sales tax regimes, and enforcing real-time reporting from businesses. The FBR leadership will play a pivotal role in executing these policy shifts, and the government is eager to ensure that only capable and reform-minded officers are in charge during this critical transition.

Another significant factor behind the reshuffle is the anticipated renewal of Pakistan’s agreement with the IMF. The new Extended Fund Facility (EFF) is likely to contain structural benchmarks related to tax reforms, digitalization, and administrative autonomy of the FBR. The government wants to demonstrate its commitment to these reforms by initiating changes at the top tier of the tax authority. Some senior officers currently holding key positions may be rotated out due to underperformance, while others may be posted to strategic roles based on their experience with international taxation and technology-driven compliance.

The reshuffle may also be designed to counter political pressures that often result in arbitrary postings and erode the institution’s credibility. In recent years, the FBR has faced criticism for politically motivated appointments, which have affected both morale and effectiveness. The new changes are expected to be merit-based, with an emphasis on officers who can help restore the institution’s integrity. Additionally, the FBR’s new leadership will be expected to improve taxpayer facilitation and transparency as part of the government’s broader goal of restoring public trust in the tax system.

As the reshuffle process gathers pace, several names are already under consideration for key appointments. The Establishment Division, in coordination with the Prime Minister’s Office, is expected to finalize the list soon. The upcoming days are likely to see intense lobbying and maneuvering among senior bureaucrats, but the final decisions are anticipated to reflect a more reform-oriented approach.