Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial has announced that the government has prepared a clear roadmap to increase the tax-to-GDP ratio to 18% by fiscal year 2028 through broadening the tax base.
Speaking at a seminar organized by the Pakistan Business Council, he stated that the current tax-to-GDP ratio stands at 10.33%, while provincial contributions are only 0.85%. According to him, through automation, digitalization, and the track-and-trace system, the federal tax ratio will be raised to 15%, while the provinces must increase their share to 3%.
The FBR chairman said the department has collected data on tax evaders, and the track-and-trace system is helping significantly control tax evasion. He gave an example that 2–3 years ago, two types of sugar were available in the market—tax-paid and non-tax-paid—but now only tax-paid sugar is being sold. He added that in the textile spinning sector, a record of 1.5 million bales exists, but FBR has no record of the bales produced in Faisalabad’s yarn market—where they went and whether they were exported.
Rashid Mahmood Langrial stated that a major example of tax evasion is that more than 90% of hospitals in the country accept only cash payments and do not take debit cards, credit cards, or online banking payments in order to hide their actual income. He said only 150,000 doctors are registered with FBR, and on average they pay just Rs 2 million in income tax annually, despite their lifestyles indicating a monthly income of over Rs 1 million.
Defending the 2% tax on exporters, he said it could be withdrawn if the government feels it is hurting exports. He also admitted that manufacturing and corporate sectors face heavy taxation and that tax rationalization is essential to make them competitive. He emphasized that there is no justification for super tax and high corporate tax, and efforts are underway to reduce them according to fiscal capacity.
On the occasion, Member Inland Revenue Operations Dr. Hamid Atiq Sarwar said the government has concluded that no tax amnesty scheme will be introduced in the future, as such schemes always benefit tax evaders.
Earlier, FBR’s McKinsey team member Ali Jan Khan briefed the participants on measures taken to curb tax evasion and broaden the tax net.
