ISLAMABAD: Prime Minister Shehbaz Sharif has directed the closure of Pakistan Revenue Automation Limited (PRAL) within six months, a move that has raised alarms over potential disruptions in the Federal Board of Revenue’s (FBR) tax operations. PRAL, which serves as the central hub for tax data and transactions, has been a crucial part of Pakistan’s revenue infrastructure for over three decades.
Government officials confirmed that the premier ordered the company’s abolition last month, instructing that it be replaced with a new, fully autonomous organization led by top IT professionals. The new body is expected to drive FBR’s digital transformation and provide modern, end-to-end solutions for taxpayers.
PRAL currently manages tax return filing, payment processing, and data storage for the FBR. However, its aging infrastructure and delayed system upgrades have long been a point of concern. The government secured a $400 million World Bank loan in 2019 for IT modernization, but project milestones have repeatedly lapsed. Of this, $80 million was allocated for technology upgrades that remain incomplete due to divided authority between FBR’s Reforms and IT wings.
Officials warn that creating a replacement entity by December will be challenging, particularly as the government has struggled to recruit key cybersecurity personnel. Any delay or misstep could disrupt core tax services and revenue operations.
PRAL’s management has repeatedly cautioned that slow progress in setting up new data centers could compromise the reliability of FBR’s systems. The prime minister had aimed to inaugurate the new facilities on August 14, but sources say the servers are still not fully operational.
Meanwhile, the FBR has faced setbacks in its enforcement drive against under-taxed individuals. Plans to restrict cash-based transactions and bar certain purchases by non-compliant taxpayers have been softened, potentially weakening revenue collection efforts pledged to the International Monetary Fund.
The government now faces a dual challenge: ensuring a smooth transition from PRAL to a new IT entity while safeguarding critical tax operations and meeting its revenue commitments.
