FBR revenue jumps 40% as Pakistan sustains fiscal discipline

September 03, 2026 (MLN): Pakistan has achieved three consecutive years of primary fiscal surpluses, with the government now focused on sustaining this discipline through reduced civil government running costs and lower debt servicing expenses.

This was highlighted at the "High Level International Dialogue on Taxation for Fiscal Sustainability in Pakistan," organised by the Asian Development Bank (ADB) at Marriott Hotel, Islamabad, where Federal Minister for Finance & Revenue, Senator Muhammad Aurangzeb, delivered the keynote address.

Pakistan printed a $3 billion dual-tranche Eurobond overnight, the single largest transaction of its kind in the country's history.

The order book was twice the size of the printed amount, drawing a diversified investor base across Asia, the Middle East, Europe, and the US, supported by three credit rating upgrades since April.

The bond was issued in 5.5-year and 10-year tranches as part of a structured 3-year Medium-Term GMTN strategy aimed at retiring short-term expensive debt, extending maturities, and reducing rollover risk. Future issuances under the strategy will include Sukuks, rupee-denominated dollar-settled bonds, and Panda bonds.

The twin structural deficit has been reduced from 12.5% of GDP a few years ago to 2.6% of GDP by the end of June. The current account is nearly balanced, while the fiscal deficit has fallen to a 22-year low of approximately 2.6%.

The Federal Board of Revenue (FBR) recorded a 40% increase in revenue collection over the past two years, with collection reaching Rs13 trillion by the end of last year.

The tax-to-GDP ratio improved from 8.8% to 10.3%, with a long-term target of taking the ratio into the 13% range to secure Pakistan's fiscal standing internationally.

FBR's transformation is being built around three core pillars People, Process, and Technology. On the integrity front, neither the Finance Minister nor the Prime Minister has made or will make any "sifarish" (undue political influence) in FBR postings, transfers, or appointments, showing a strict two-way commitment to integrity within the organisation.

Capacity building efforts are also underway, with third-party auditors being used to strengthen operational capacity and officer training.

Technology has been described as the "game-changer" in this transformation. Digital Production Monitoring has moved from the design phase into full execution, directly generating additional sales tax revenues. Digital invoicing now covers roughly 75% to 80% of national sales turnover in terms of registrations.

PRAL, FBR's IT arm, has also been strengthened in governance and resources to support the new operating model passed by Parliament. Discussions are also underway with FBR leadership on integrating artificial intelligence and integrated data with international best practices, which may require upcoming legislative changes.

On the customs side, faceless assessment has been implemented to improve transparency and service quality for businesses. The average revenue per declaration has risen to Rs8.5 million, up from Rs7.6 million, alongside strengthened customs enforcement and broader ecosystem development.

Efforts are also underway with the ADB to broaden the narrow tax base and eliminate distortions created by tax exemptions. Unlike previous "boom-and-bust cycles," there is now full clarity and complete ownership at the Prime Minister, Cabinet, and political leadership level to carry these structural reforms through to completion.

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