Print Print edition: 2026-01-26

FBR chairman says provinces have to step up tax collection efforts

Published January 26, 2026 Updated January 26, 2026 06:04am

2 min

By Saeed Akhtar Baloch

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LAHORE: Chairman Federal Board of Revenue (FBR) Rashid Langrial has said that provinces would have to make greater efforts than the federation to collect taxes, as their revenue gap is large, while the federation should curtail its expenditure too.

Sharing his ideas during a panel discussion held under Afkaar-e-Taza Thinkfest at Alhamra Arts Centre, on Sunday, Langrial stressed that economic growth is essential for tax collection. He said that under the 2009 NFC Award, both the federation and the provinces had agreed to raise the tax-to-GDP ratio to 15 percent. He noted that provinces have three major taxes: services tax, agricultural income tax, and property tax.

He explained that to achieve a tax-to-GDP ratio of 15 percent, provinces would need to contribute at least 2.5 percent, while the remaining 12.5 percent would be collected by the federation. If the ratio were increased to 18 percent, the provinces’ share would rise to 3 percent.

Langrial stressed the need for discussions on structural issues, adding that talks would be held on NFC-related matters. He questioned whether the federation should continue spending money on small projects in the provinces, saying that such issues could be resolved through mutual understanding. He highlighted that property tax contributes 5 percent of GDP in Malaysia, 3 percent in Indonesia, and 2 percent in India, whereas in Pakistan it stands at just 0.8 percent.

Langrial said the low level of tax collection by provinces was due to insufficient pressure from the federation. He pointed out that last year, per capita property tax collection in Karachi was Rs 111, compared to Rs 11,233 in the Indian city of Bangalore— nearly 100 times higher. In Lahore, per capita property tax collection stood at Rs 623, while Chandigarh collected Rs 1,276 per capita. He reiterated that provinces must make greater efforts than the federation to collect taxes, as their revenue gap is substantial. The FBR chairman also emphasized that economic growth is vital for increasing tax revenues.

He mentioned that the installation of cameras in sugar mills led to the collection of an additional Rs 60 billion in taxes. He rejected the notion that funds had been wasted, noting that the money was transferred to the provinces where significant development work is under way.

Referring to the Suthra Punjab initiative, Langrial said, “I also belong to a village in Punjab, and daily cleaning is now being carried out there, which was not done earlier.”

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