Pakistan tax authorities prepare reform briefing for prime minister

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Pakistan tax reform briefing

Highlights

Federal Board of Revenue will brief Prime Minister Shehbaz Sharif on Monday about digital tax enforcement covering 18 sectors with significant revenue leakage.
The estimated tax gap across these sectors is approximately Rs 1 trillion, prompting a digital monitoring rollout completed in sugar, cement, tobacco, tiles and fertilizers sectors.
Full supply chain data integration aims to boost transparency, with equipment procurement for steel, poultry and tires finished by October 15 and further installations due by October 30.

Digital tax enforcement plan and reform agenda

As reported by Business Recorder, the Federal Board of Revenue is briefing the prime minister on Monday on the implementation status of the faceless system on the Inland Revenue side, along with a transformation plan and digital measures targeting 18 sectors with significant revenue leakage.

Officials are also preparing proposals on human resource reforms, revamping and restructuring of the tax machinery, while integrity issues in FBR field formations are under the notice of the prime minister. A high-level review meeting on the ongoing reforms is being chaired by Shehbaz Sharif.

The tax authority's digital ecosystem plan focuses on linking the full economic value chain, from imported and locally sourced raw materials to manufacturing and final consumer purchases. Centralized data generated through the system is intended to support strategic economic decision-making and strengthen transparency in tax administration.

Sector rollout and revenue impact

The estimated tax gap across the 18 sectors stands at about Rs 1 trillion, underscoring the scale of the revenue challenge facing Pakistan's fiscal authorities. Sales production monitoring in major industries is due to be completed by the end of December as part of the push to reduce the difference between actual and potential tax collection.

Data cited in the briefing shows that digital monitoring has been fully installed in the sugar, cement, tobacco, tiles and fertilizers sectors. Installation is still in progress in textile, packaged water, packaged juice and packaged milk.

Equipment purchases for steel, poultry and tires have been completed by October 15, while procurement for tea, household electronics, leather, paper and board, and oil and ghee is due to be completed by October 30. The broader restructuring of the FBR is expected to reinforce tax administration and improve visibility across the economy.

Our earlier article on the push to extend Pakistan’s Tax Year 2026 income tax filing deadline explained how tax experts and business groups urged the FBR to allow more time for submissions after the final return form notification. It also highlighted repeated IRIS portal glitches and pending extension requests that, according to stakeholders, were disrupting compliance and raising the risk of penalties for taxpayers.

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