ISLAMABAD: The Federal Board of Revenue (FBR) has requested additional staff and logistics to address the staggering Rs7 trillion tax gap in Pakistan.
According to FBR officials, a key strategy in this endeavour is to enhance field operations and informant networks to curb tax evasion. Currently, the FBR faces significant challenges in monitoring tax affairs across all districts countrywide.
The tax authority has only 25 offices nationwide, which is insufficient. Furthermore, the FBR’s tax machinery receives a mere Rs1 for every Rs200 of income, mentioning the need for increased resources.
In comparison, India allocates 1.5% of its total revenue towards tax operations, whereas Pakistan’s expenditure in this regard is equivalent to only 0.44%. The FBR has also pointed out that provincial departments receive salaries and benefits that are 20 times higher than those of the FBR.
To effectively monitor key sectors such as sugar, cement, tobacco, and fertilizers, the FBR requires more resources, including vehicles. In the 2022-23 fiscal year, the Punjab Revenue Authority had set a tax target of Rs240 billion.
Earlier, the FBR came under severe criticism after deciding to purchase 1,010 cars, each with a 1200cc engine, for officers at a staggering cost of Rs 3 billion.
A Senate panel called for the cancellation of a contract to purchase 1,010 new cars for tax officers, citing concerns over the lack of competition in the bidding process.
According to Senator Mandviwalla, Chairman of the Senate Standing Committee on Finance, the contract was directly awarded to Honda Atlas without competition, despite Indus Motors offering a lower price of Rs200,000.
