KARACHI: Tax experts warn that the Federal Board of Revenue’s (FBR) digitalisation efforts will fail to boost revenue without enforcing compliance among non-filers.
Karachi Tax Bar Association (KTBA) Vice President Faiq Raza said Pakistan’s tax-to-GDP ratio remains low at 10–11%, while the FBR targets 18% by 2027–28.
“Only the return filing-to-GDP ratio is rising, but it doesn’t significantly impact revenue,” Raza said. “Many filers submit returns only to avoid advance tax.”
He stressed that expanding the tax base is crucial, rather than focusing solely on increasing digital return filings among existing taxpayers.
Raza added that once FBR systems are fully digital, authorities will automatically access taxpayer data, reducing manual interventions and improving efficiency.
Tax expert Imran Awan noted that FBR’s digitalisation currently emphasizes existing taxpayers, neglecting non-filers. He also highlighted technical issues in the IRIS portal, causing delays during Return filings.
“Digitalisation alone won’t formalize the economy unless the department actively traces undocumented transactions and non-filers,” Awan said.
FBR officials recently briefed Finance Minister Muhammad Aurangzeb on the Tax System Digitisation Project, emphasizing automation, technological upgrades, and improved compliance monitoring.
Despite the concerns, FBR reported a 17.6% rise in income tax returns filed for 2025. Total returns reached 5.9 million by October 31, compared to 5 million last year.
Among them, 3.6 million taxpayers paid taxes, reflecting an 18.6% increase in revenue-contributing filers. Individual taxpayers paid Rs. 69 billion, up 15% from last year.
Experts agree that digitalisation offers convenience but will only increase national revenue when paired with strict enforcement targeting non-filers.
