FBR Reforms Push Tax-to-GDP Ratio Above 10% for FY25

September 11, 2025:

Pakistan’s tax-to-GDP ratio climbed to 10.24% in FY25, up from 8.8% last year, driven by the Federal Board of Revenue’s (FBR) transformation plan approved in October 2024. Enforcement-led revenue also rose nearly eightfold year-on-year, reflecting the impact of reforms.

At a meeting with OICCI and PBC representatives, FBR Chairman Rashid Mahmood highlighted measures focusing on people, technology, and processes. Around 1,600 new auditors are being hired, supported by training at leading universities, while a new Reward and Rating System is strengthening integrity-based appointments.

Technology-driven reforms include digital production monitoring in major industries like sugar, cement, fertilizer, beverages, poultry, and textiles. Integration of databases and AI-powered risk parameters is being applied to improve audits and compliance.

Officials noted that faceless customs appraisement has already boosted revenue per GD by 17.3%, while reducing port dwell times and demurrages.

Business leaders praised the progress, citing improved transparency and accountability. To further taxpayer facilitation, a new division at LTO Karachi will directly address taxpayer issues, while a joint committee of FBR, PBC, and OICCI is being proposed to resolve valuation disputes.

The session ended with mutual appreciation, as stakeholders agreed the reforms could broaden the tax net and reduce the burden on compliant taxpayers.