ISLAMABAD: Federal Board of Revenue Chairman Rashid Mehmood Langrial Thursday said the government has evolved a roadmap to enhance the tax-to-GDP ratio to 18 percent till FY28 through the expansion of the tax base.
Addressing a seminar organised by the Pakistan Business Council (PBC), the FBR Chairman spoke on the topic of “Transformation of FBR” and said that right now the tax to GDP ratio is 10.33 percent and the contribution of taxes from provinces is merely at 0.85 percent.
He said that the FBR, through automation, digitalisation and track & trace system, planned to increase the tax ratio to 15 percent at the federal level, whereas the contribution of provinces has to be increased to 3 percent.
FBR seeks 18pc tax-to-GDP ratio by 2027-28
He said the FBR has collected data of the people who are involved in tax evasion. He said that through the track and trace system, the FBR is able to counter tax evasion. He said that till 2-3 years back, there were two types of sugar available in the market, i.e., taxed and untaxed, but now only taxed sugar is available.
Langrial said even in the textile spinning sector, 1.5 million bales are accounted for. “The FBR has no record of bales produced at Sutar Mandi of Faisalabad and where they are exported to.”
He said that the tax evasion could also be gauged by the fact that more than 90 percent of the hospitals in the country only accept cash instead of payments from debit/credit cards or online bank accounts to hide their real income. Langrial said just 150,000 doctors are registered with the FBR and on average they pay just Rs 2 million income tax per annum, which is mind-boggling because their life style suggests that their earnings are over a million per month.
The FBR Chairman defended the 2 percent tax on the exporters, but at the same time, he added that if the government thinks that it is hampering the exports, then it would be withdrawn.
He admitted the fact that the manufacturing and corporate sectors are heavily taxed and make them competitive tax rationalisation is need of the hour. “We know that there is no justification for taxes like the super tax and high corporate tax, and we’re working to reduce them from whatever fiscal space is available to us,” he said. On this occasion, Dr Hamid Ateeq Sarwar (Member (IR Operations) said the government has now reached at a conclusion that now tax amnesty scheme would not be introduced at any cost because it always facilitates the tax evaders.
Earlier, Ali Jan Khan (McKinsey Team of FBR) brief about the measures taken by the FBR to arrest tax evasion and the broadening of the tax net.
Copyright Business Recorder, 2025
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