Pakistan’s tax-to-GDP ratio has climbed to 10.3% for FY 2024–25, marking a significant improvement from the five-year average of 8.7%, according to the Federal Board of Revenue (FBR). The surge is mainly driven by a sharp increase in direct taxes, which now make up 5.1% of GDP, reflecting stronger enforcement, structural reforms, and improved compliance.
FBR’s report highlights that Rs874 billion was recovered through enforcement actions this fiscal year, compared to just Rs105 billion last year an eightfold increase. The authority credited these gains to sector-specific reforms, technology integration, and better governance.
Key contributions came from industries like sugar (Rs25 billion) and cement (Rs12.8 billion), aided by real-time production monitoring. The FBR also expanded digital oversight, with 40,000 POS installations now covering 38% of Tier-1 retailers.
An official said,
“The rise in direct taxes reflects growing transparency, reduced leakages, and increased voluntary compliance across key sectors.”
Additionally, customs digitization and faceless assessment systems have enhanced neutrality, while new performance metrics for officers boosted efficiency. FBR has set a target of 18% tax-to-GDP ratio by 2027–28, emphasizing sustained reforms and fair taxation practices.