Tax experts have highlighted that the Federal Board of Revenue’s (FBR) ongoing digitalisation initiatives will achieve limited impact unless paired with stronger enforcement measures targeting non-filers. Karachi Tax Bar Association (KTBA) Vice President Faiq Raza told Business Recorder that Pakistan’s tax-to-GDP ratio, currently around 10–11%, needs a significant boost to meet the government’s FY28 target of 18%. While digital systems are making return filing easier, he noted that most of the increase is in filing activity rather than meaningful revenue growth, with roughly half of all filers submitting returns solely to avoid advance tax without contributing additional revenue.
Raza emphasised that expanding the tax base requires a focus on enforcement, not just return filing. He pointed out that digitalisation must be accompanied by institutional upgrades, ensuring that authorities have real-time access to taxpayer data rather than relying on information submitted manually. The remarks followed a briefing by the Project Steering Committee of the Tax System Digitisation Project to Finance Minister Muhammad Aurangzeb, which showcased how technology and automation could formalise economic activity and create a more documented economy.
Tax expert Imran Awan added that the FBR’s digital push largely focuses on existing taxpayers, with insufficient attention on non-filers and undocumented transactions. He also cited recurring technical issues with the IRIS online portal, including system slowdowns and crashes during the recent filing cycle. Both experts stressed that digitalisation must be accompanied by capacity upgrades within FBR to make enforcement effective. Once fully operational, a digitised system would enable authorities to access taxpayer data comprehensively, reducing discretionary power and allowing the identification of non-filers for enforcement action.
Despite these concerns, FBR data indicates positive trends in filings for Tax Year 2025. As of October 31, a total of 5.9 million returns were filed, marking a 17.6% increase from 5 million during the same period last year. Of these, 3.6 million returns included tax payments, up 18.6% compared to 2024. Individual taxpayers contributed nearly Rs69 billion in taxes, up from Rs60 billion the previous year, representing a 15% year-on-year growth. Experts believe that while digitalisation simplifies filing processes and improves data transparency, it will only translate into significant revenue gains when combined with comprehensive enforcement measures and capacity enhancement across FBR operations.
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