Tax experts have cautioned that the Federal Board of Revenue’s (FBR) digitalisation drive will deliver limited results unless it is paired with robust enforcement measures to bring non-filers into the tax net.
Karachi Tax Bar Association (KTBA) Vice President Faiq Raza told Business Recorder that Pakistan’s tax-to-GDP ratio — currently hovering between 10–11% — must rise significantly if the government hopes to meet its target of 18% by FY28.
“Only the return-filing-to-GDP ratio is increasing, which does not translate into meaningful revenue gains,” he said, adding that around half of all filers submit returns merely to avoid advance tax and contribute nothing to actual tax collection.
Raza stressed that expanding the tax base requires stronger enforcement rather than an exclusive focus on return filings. He noted that digitalisation must also be accompanied by institutional upgrades.
“Once the system becomes fully digital, the department must be equipped so that all information is automatically available with the authorities instead of relying on taxpayer-provided data,” he said.
The remarks come days after the Project Steering Committee of the Tax System Digitisation Project briefed Finance Minister Muhammad Aurangzeb on ongoing reforms. The meeting underscored that modern technology and automation could promote a more documented, formalised economy.
However, tax expert Imran Awan said the FBR’s digital efforts still appear centred on existing taxpayers.
“There is no focus on non-filers,” he said. “There is also no clear mechanism to trace undocumented transactions.”
Awan criticised persistent issues in the IRIS online portal, including system slowdowns and crashes during the recent filing cycle. Like Raza, he emphasised that digitalisation must be complemented by capacity upgrades within the tax machinery.
Despite the concerns, experts acknowledged that digitising FBR systems would make filing easier and ultimately help both taxpayers and the authority. Once fully implemented, a digital system would give the FBR complete access to filers’ data, reducing discretionary powers of tax officers and creating room to identify and bring non-filers into the net.
Meanwhile, FBR data shows a notable rise in return filings for Tax Year 2025. As of October 31, a total of 5.9 million returns were filed — a 17.6% increase from 5 million in the same period last year. Of these, 3.6 million taxpayers submitted returns with tax payments, up 18.6% from 2024.
Individual taxpayers contributed nearly Rs69 billion in taxes, compared to Rs60 billion last year, reflecting a 15% year-on-year growth.
