Tax experts have warned that the Federal Board of Revenue’s (FBR) digitalisation efforts will have limited impact without targeting non-filers. Currently, Pakistan’s tax-to-GDP ratio stands at 10-11%, and FBR aims to raise it to 18% by 2027-28. Analysts say increasing return filings alone will not significantly improve revenue.
Karachi Tax Bar Association vice president Faiq Raza said about 50% of filers only submit returns to avoid advance tax, contributing nothing to revenue. He stressed that expanding the tax base through enforcement is urgently needed. Raza added that digitalisation should be accompanied by upgrading FBR systems to automatically access taxpayer data.
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Tax expert Imran Awan criticised the FBR for focusing mostly on existing taxpayers. He highlighted the lack of mechanisms to trace undocumented transactions and noted technical issues with the IRIS online portal. Awan said a fully digital system would make tax filing easier and allow authorities to integrate non-filers.
Despite concerns, FBR reported growth in return filings for Tax Year 2025. By October 31, 5.9 million returns were filed, up 17.6% from last year. Taxpayers paying along with returns rose 18.6%, and individual payments increased by Rs9 billion, showing a 15% rise.
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Experts, however, argue these gains are not enough without enforcement targeting non-filers. They recommend combining digitalisation with robust policies to expand Pakistan’s formal tax base and improve overall revenue collection.