The idea was to tax profits/earnings of the SBP on the pattern where some central bank administrations in advanced countries are being taxed by the governments. Responding to the proposal, the Finance Minister termed it as impracticable. The taxation of SBP would not expand the tax base of Pakistan, but it would only show revenue from one pocket to another.
If the government taxed SBP, it would only mean that some amount would come through the FBR instead of directly coming to the Ministry of Finance. The overall revenue would remain the same, but it would only show some revenue under the head of FBR. Secondly, all laws would have to be changed for implementation of this proposal, which also seemed to be impracticable.
Sources said that the revenue of the bank is coming directly to the Ministry of Finance. The move to tax SBP would only show better performance of the FBR, which would not be justified. Sources added that the FBR's idea was termed as unviable at the initial stage of discussion on tax policy at the board's headquarters.