FBR Unveils Ambitious Transformation Plan to Boost Tax-to-GDP Ratio to 18%

The Federal Board of Revenue (FBR) unveiled its comprehensive transformation plan aimed at increasing Pakistan’s tax-to-GDP ratio from the current 10.24% to 18% over the medium term. The plan, which focuses on digitization, institutional reforms, and enhanced human resource capacity, was presented to leading business figures during a high-level briefing. The meeting, chaired by FBR Chairman Rashid Mahmood, was attended by representatives from the Overseas Investors Chamber of Commerce and Industry (OICCI), Pakistan Business Council (PBC), and other prominent business groups. The transformation plan, approved by the prime minister in October 2024, outlines a roadmap to address the country’s tax gaps and improve revenue collection. According to the plan, the FBR’s contribution to the tax-to-GDP ratio will rise to 14%, while provincial revenues will increase by 3% and the petroleum levy by 1%, collectively reaching the 18% target. Officials emphasized that the reforms are designed to plug significant gaps in major taxes through the adoption of technology and streamlined processes. Member Inland Revenue Operations, Dr. Hamid Ateeq Sarwar, delivered a detailed presentation on the plan’s implementation. He highlighted reforms in three critical areas: people, technology, and processes. To enhance institutional capacity, the FBR is hiring approximately 1,600 auditors to strengthen its audit capabilities. Newly recruited officers will undergo training at top universities to align their skills with global corporate standards. Appointments are being made based on integrity, with officers evaluated through a reward and rating system and offered performance-based incentives. Participants were also given demonstrations of technology-driven solutions across various sectors. These initiatives have already yielded results, with the FBR’s tax-to-GDP ratio increasing from 8.8% in 2023-24 to 10.24% in 2024-25. Notable achievements include the introduction of the Faceless Customs Appraisement system, which has boosted revenue per Goods Declaration (GD) by 17.3% and improved customs efficiency at ports by reducing dwell times and demurrage costs. Enforcement measures have also seen a dramatic increase, generating eight times more revenue in 2024-25 compared to the previous year. Chairman Langrial underscored the FBR’s commitment to taxpayer facilitation, announcing the establishment of a new facilitation division at Karachi’s Large Taxpayer Office (LTO). Senior officers will personally address taxpayers’ concerns to ensure a more responsive and efficient system. The Chairman also proposed the formation of a joint committee comprising representatives from the PBC, OICCI, and FBR to resolve issues related to valuation rulings and other matters.