FBR reforms lift tax-to-GDP ratio to 10.24%

 September 11, 2025 (MLN): The Federal Board of Revenue’s (FBR) ongoing transformation plan, approved by the Prime Minister in October 2024, has raised Pakistan’s tax-to-GDP ratio from 8.8% in 2023-24 to 10.24% in 2024-25, while enforcement-driven revenue rose eightfold compared to last year.

These achievements were shared during a meeting with representatives of the Overseas Investors Chamber of Commerce and Industry (OICCI) and Pakistan Business Council (PBC), chaired by FBR Chairman Rashid Mahmood.

Member Inland Revenue Operations, Dr. Hamid Ateeq Sarwar, presented details of the reforms, emphasizing three focus areas: people, technology and processes. To strengthen audit capacity, FBR is hiring around 1,600 auditors, while newly recruited officers will undergo training at leading universities.

Integrity-based appointments are also being reinforced through a Reward and Rating System with high-powered incentive packages.

Highlighting the role of technology, officials briefed participants on digital production monitoring in key sectors such as sugar, cement, fertilizer, beverages, tobacco, poultry and textiles.

Integration of data sources and digitalized processes will link economic activity with tax returns, while AI-driven risk parameters will guide taxpayer audits.

Participants were given demos of the technology solutions and informed that faceless customs appraisement has already raised revenue per GD by 17.3% and reduced dwell time and demurrages at ports.

The business leaders commended the progress, noting that technology-driven reforms are making FBR more transparent and accountable.

Chairman Mahmood stressed the importance of taxpayer facilitation, pointing to a new division at LTO Karachi where senior officers will directly address taxpayers’ concerns.

He also proposed forming a committee of PBC, OICCI, and FBR representatives to resolve valuation and related issues.

Business representatives welcomed the pace of reforms and expressed hope that broadening the tax net will ease the burden on compliant taxpayers.

The session concluded with mutual appreciation and a commitment to continue such stakeholder engagements.

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