FBR Set to Bring 2.8 Million Households into Tax Net

The Federal Board of Revenue (FBR) is all set to bring around 2.8 million potential households into the tax net which would contribute approximately Rs. 1.6 trillion to the national economy. There are around 3.5 million top households liable to pay taxes to the government, however out of which 2.8 million are not paying taxes, Spokesperson FBR, Bakhtiar Muhammad told APP. The incumbent government had embarked upon a comprehensive plan to enhance the tax-to-GDP ratio and resultantly the number of tax filers as well as tax collection went up during the current fiscal year (2024-25). Bakhtiar said the filing of tax returns witnessed an impressive increase of 105 percent going up from last year’s 1.8 million to 3.7 million owing to prudent policies adopted by the government. The board has decided to impose 15 restrictions on non-filers within two to three months through a finance bill, he said adding the non-filers would not be allowed to purchase properties and vehicles and would not also travel abroad or open current account in any bank. He highlighted that the taxpayers enjoyed a deduction in bank transaction rates while non-filers have to pay some extra amount to get this job done, however, now FBR is going to finish the non-filer category. “This development will lead to mandatory tax filing for individuals”, he added. He emphasized that earned income could be used in two ways either by investment or by spending, however, added FBR would make both these activities inaccessible (absolutely impossible) for non-filers with the help of automation where FBR would integrate payment and invoicing systems. Bakhtiar said that digitization of the examination and appraisal process in customs was underway. Meanwhile, talking about the revenue collection, the spokesperson highlighted that the board surpassed the September 2024 target by collecting Rs. 1.106 trillion. It is pertinent to mention here that FBR Chairman Rashid Mahmood Langrial during a recent meeting with the World Bank (WB) discussed the FBR Transformation Plan and major reforms, focusing on aligning initiatives under the Pakistan Raises Revenue Project. The reforms include tax policy reforms, digitalization initiatives, capacity building of HR, anti-smuggling initiatives, and broad-based tax administration reforms. Meanwhile, to speed up the FBR digitization process the board has re-designated the functions of senior tax officials as part of the restructuring to simplify function and accelerate digitization. In this regard, the board issued a notification that highlighted its commitment to empower the member operation and policy to monitor tax compliance better. As per the notification, the post of Member (Public Relations) is re-designated as Member (Taxpayers Services) while the post of Member (Accounting) is re-designated as Member (Organizational Audit). It was also directed that the Director General (Revenue Analysis) will report to Member (IR-Policy) FBR and the Director General, Internal Audit (IR) will report to Member (Organizational Audit). Similarly, the posts of Member (Information Technology) and Member (Digital Initiatives) are merged and re-designated as Director General (Information Technology and Digital Transformation). DG (IT &DT) will report to Member (IR-Operations), FBR. To streamline the function the powers and functions of Member (Information Technology) and Member (Digital Initiatives) will be exercised by the Member (IR-Operations).