The Federal Board of Revenue (FBR) is set to bring approximately 2.8 million potential households into the tax net, which is expected to contribute around Rs. 1.6 trillion to the national economy. “There are about 3.5 million top households liable to pay taxes to the government, but 2.8 million of them are not paying taxes,” FBR Spokesperson Bakhtiar Muhammad told APP.
The current government has embarked on a comprehensive plan to enhance the tax-to-GDP ratio, resulting in an increase in both the number of tax filers and tax collection during the current fiscal year (2024-25). Bakhtiar noted that the filing of tax returns saw an impressive increase of 105 percent, rising from last year’s 1.8 million to 3.7 million, due to prudent policies adopted by the government.
The board has decided to impose 15 restrictions on non-filers within two to three months through a finance bill. Non-filers will not be allowed to purchase properties and vehicles, travel abroad, or open current accounts in any bank. He highlighted that taxpayers enjoy deductions in bank transaction rates, while non-filers have to pay extra. However, the FBR is planning to eliminate the non-filer category entirely. “This development will lead to mandatory tax filing for individuals,” he added.
He emphasized that earned income could be used in two ways: either by investment or by spending. However, the FBR plans to make both activities inaccessible for non-filers through automation, integrating payment and invoicing systems.
Bakhtiar mentioned that the digitization of the examination and appraisal process in customs is underway. Regarding revenue collection, the spokesperson highlighted that the board surpassed the September 2024 target by collecting Rs1.106 trillion.
It is pertinent to mention that FBR Chairman Rashid Mahmood Langrial recently discussed the FBR Transformation Plan and major reforms with the World Bank, focusing on aligning initiatives under the Pakistan Raises Revenue Project. The reforms include tax policy reforms, digitalization initiatives, capacity building of HR, anti-smuggling initiatives, and broad-based tax administration reforms.
To accelerate the FBR digitization process, the board has re-designated the functions of senior tax officials as part of restructuring efforts to simplify functions and accelerate digitization. A notification was issued highlighting the commitment to empower the member operation and policy to better monitor tax compliance.
According to the notification, the post of Member (Public Relations) is re-designated as Member (Taxpayers Services), while the post of Member (Accounting) is re-designated as Member (Organizational Audit). It was also directed that the Director General (Revenue Analysis) will report to Member (IR-Policy) FBR, and the Director General, Internal Audit (IR) will report to Member (Organizational Audit). Similarly, the posts of Member (Information Technology) and Member (Digital Initiatives) are merged and re-designated as Director General (Information Technology and Digital Transformation).
DG (IT & DT) will report to Member (IR-Operations), FBR. To streamline functions, the powers and functions of Member (Information Technology) and Member (Digital Initiatives) will be exercised by the Member (IR-Operations).
