Experts Urge FBR to Broaden Tax Base for Revenue Target

Experts have suggested that the Federal Board of Revenue (FBR) should focus on expanding the tax base to meet its revenue target of Rs14.1 trillion by 2025-26, rather than increasing the burden on existing taxpayers.

Data indicates that Pakistan has approximately 5.9 million tax filers out of a workforce of 71 million, representing an 8.4% tax filer to workforce ratio. Conversely, banks hold 177 million accounts, with 137 million unique account holders, which accounts for 60% of the adult population. These accounts contain Rs32.7 trillion in deposits as of May 2025, with banks possessing complete Know Your Customer (KYC) data. These figures were highlighted by former Interior and Commerce Minister Gohar Ejaz on social media platform X.

Ejaz stated that the FBR needs assistance in identifying individuals who are not filing taxes. He presented the breakdown of tax filers in Pakistan for 2024-25 as follows: 5.9 million total tax filers, including 5.8 million individuals, 104,269 Associations of Persons (AOPs), and 87,900 companies.

Ejaz further emphasized that the FBR should avoid increasing taxes on existing filers and instead concentrate on broadening the tax base. He noted that with Rs1.59 trillion in withholding taxes and Rs1.12 trillion in voluntary payments during the first half of 2024-25, compliant taxpayers are already making significant contributions. He highlighted the disparity between 137 million unique bank account holders and 5.9 million tax filers.

It was suggested that the FBR should prioritize targeting non-filers, as increasing the burden on existing taxpayers will not be effective. Banks possess extensive KYC data on account holders with substantial deposits, offering readily available complete account details, transaction histories, and financial profiles of non-filers.

According to Ejaz, effective governance involves utilizing available data intelligently. He concluded that achieving Pakistan’s revenue targets requires identifying and incorporating the remaining 131 million bank account holders with notable financial activity into the formal tax system, rather than overburdening the existing 5.9 million compliant taxpayers.