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Pakistan’s government has outlined a major revenue reform plan as the FBR aims to raise the tax-wto-GDP ratio from 10.33% to 18% by FY28, with a strong focus on expanding the tax base, curbing evasion, and improving documentation.
The background of this move stems from years of low tax collection, weak enforcement, and large undocumented sectors. The FBR leadership now wants to shift towards digital monitoring and stronger provincial participation to stabilize revenues.
Speaking at a Pakistan Business Council seminar, FBR Chairman Rashid Mehmood Langrial said federal tax collection needs to rise to 15%, while provinces must increase their share to 3% over the next three years. He added,
“We have compiled detailed data of individuals and businesses evading taxes, and digital tools will help us close these gaps.”
Langrial said automation, digitalisation and the track and trace system are central to the new roadmap. He highlighted improvements in the sugar sector, which is now fully documented, but pointed out major compliance gaps in industries like textile spinning where production and movement of bales remain largely unrecorded.
He also underscored widespread under reporting in the medical sector, noting that more than 90% of hospitals take cash payments to hide income and that only 150,000 doctors are registered with the FBR despite high lifestyles.
Regarding exporters, Langrial defended the existing 2% final tax, but said it could be withdrawn if it hurts exports. He acknowledged that corporate and manufacturing sectors are already overtaxed, adding that rationalisation and relief depend on available fiscal space.
