Islamabad: The Federal Board of Revenue (FBR) has launched a series of strategic measures to combat a significant projected revenue shortfall, focusing on enhanced enforcement and broader tax compliance. These initiatives come in response to a PKR 230 billion deficit expected for the second quarter of the fiscal year 2024-25.
According to Zameen.Com, the FBR’s revenue collection for October 2024 stood at PKR 877 billion, missing the PKR 980 billion target by PKR 103 billion. The cumulative shortfall for the fiscal year’s first four months reached PKR 196 billion. These deficits have prompted the FBR to implement both immediate and long-term strategies aimed at increasing tax collections through rigorous enforcement and targeted compliance activities.
As part of its enforcement drive, the FBR has set its sights on approximately 190,000 high-net-worth individuals who are currently not registered as filers. Utilizing third-party data, the agency has issued tax notices to these potential taxpayers, aiming to recover an estimated PKR 7 billion in tax liabilities. The FBR plans to enforce compliance among 50,000 non-filers and issue assessment orders to 25,000, employing a dedicated tracking dashboard to monitor progress.
Furthermore, the FBR is intensifying its efforts to curb corporate tax evasion, particularly focusing on the abuse of fake invoices. The Directorate General of Intelligence and Investigation Inland Revenue, under the guidance of a senior tax official, has been tasked with arresting at least two individuals from offending corporations each month to deter tax fraud. Several cases have already been initiated against companies implicated in these frauds, with tax liabilities totaling over PKR 75 billion.
On the policy front, the FBR has proposed increases in the federal excise duty on aerated and sugary drinks and adjustments to withholding tax rates on various imports and services. These changes are expected to generate an additional PKR 10.8 billion per month, contributing an estimated PKR 97.2 billion over the next three quarters.
The International Monetary Fund has also suggested that Pakistan might need to implement further tax measures if revenue shortfalls persist. These could include increasing advance income tax rates on machinery and raw materials and enhancing withholding taxes on supplies and contracts, which would substantially aid in bridging the revenue gap.
Despite these challenges, the FBR continues to prioritize timely tax refund processes. Following directives from the FBR Chairman, refunds amounting to PKR 32 billion were disbursed on November 1, 2024, covering all outstanding Sales Tax Refund Payment Orders up to the end of September 2024.