Tax experts have termed the Federal Board of Revenue’s (FBR) digitalisation initiatives insufficient, stressing that along with digitalising the tax system, an integrated policy should be formulated to bring non-filers into the tax net.
Karachi Tax Bar Association (KTBA) vice president Faiq Raza told Business Recorder the tax-to-GDP (gross domestic product) ratio should increase significantly. Currently, Pakistan’s tax-to-GDP ratio stands at 10-11%, which the FBR aims to increase to 18% by 2027-28.
“However, in contrast, only the return filing to GDP ratio is rising, which is not making any substantial difference in revenue,” Raza maintained.
According to the KTBA official, 50% of the filers are those who file returns only to avoid advance tax, and they contribute nothing to tax collection.
He was of the view that there was an urgent need to expand the tax base through enforcement.
Raza emphasised broadening the tax base rather than focusing solely on increasing the return filing to GDP ratio.
“Once the [FBR] system becomes digital, the department will also need to be upgraded, so that instead of asking a taxpayer for data, all information is automatically available with the authorities.”
The meeting of Project Steering Committee of the Tax System Digitisation Project was held earlier week at the FBR Headquarter in which Finance Minister Muhammad Aurangzeb was updated on the overall digitisation processes of the FBR.
The meeting emphasised that the use of latest technological interventions and automation of FBR systems could lead towards a more formalised and documented economy for sustained economic development of the country.
Meanwhile, tax expert Imran Awan said the FBR’s focus appeared to be mainly on existing taxpayers in its efforts for digitalisation.
“There is no mention of non-filers,” he lamented. “No clear mechanism has been outlined to trace undocumented transactions as well.”
Questioning the IRIS system, FBR’s online portal in which filers can themselves file their returns, Awan said there were major issues related to portal slowdown or website crash even in the recently filed income tax returns.
“Once the system becomes digital, the department will also need to be upgraded, so that instead of asking a taxpayer for data, all information is automatically available with the authorities.”
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Highlighting the benefits of the digitalisation of the FBR system, Awan said that would not only become easier to file taxes, but both taxpayers and the tax authority would benefit from a digital system.
The tax expert added that once the system was fully digitalised, the tax authority would have complete data of the filers, after which the role of tax officers would be minimised making things easier for the filers and facilitating the process of bringing non-filers into the system.
FBR has recorded a significant increase in income tax return filings for Tax Year 2025.
As of October 31, 2025, a total of 5.9 million tax returns were filed, compared to 5 million returns in the same period last year, showing an increase of 17.6%.
Out of these, 3.6 million taxpayers filed returns with tax payments, reflecting an 18.6% rise in taxpayers who contributed revenue along with their returns, compared to the same period in 2024.
Moreover, individual taxpayers paid nearly Rs9 billion more than last year, growing from Rs60 billion to Rs69 billion, representing a 15% increase in tax payments from individuals.
