Increase in Income Tax Filers Attributed to FBR Reforms

The count of income tax return filers in Pakistan has exceeded 7.2 million by June 30, 2025. This represents a substantial 60% surge from the 4.5 million recorded in the prior year. This increase is largely due to the ongoing reforms and digitization initiatives implemented by the Federal Board of Revenue (FBR).

The details emerged during a review meeting regarding current FBR reforms. The meeting was presided over by Prime Minister Shehbaz Sharif on Wednesday, as stated in a release by the Prime Minister’s Office (PMO).

During the assembly, it was revealed that FBR’s enforcement measures and various modifications have generated a notable 1.5% rise in the tax-to-GDP ratio in 2025, relative to 2024.

The implementation of a faceless customs clearance system is projected to curtail clearance times from 52 hours to just 12 hours within the coming three months.

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Tax collection within the retail sector saw an increase of Rs455 billion by June 30, 2025, compared to 2024. This improvement is credited to the integration of Point-of-Sale (POS) systems, the alignment of retailer systems with FBR guidelines, and escalated enforcement activities.

A specialised system has been launched to facilitate appeals within the faceless framework, ensuring efficient case resolutions through video conferencing.

These actions have resulted in a 2.16% decrease in the weighted average tariff on imports, thereby lowering raw material expenses for industries and bolstering the manufacturing sector.

The integration of recommendations from global specialists into tax reforms and the digitization of diverse economic sectors is also anticipated.

The meeting also included the presentation of supplementary proposals aimed at reforming the FBR.

PM Shehbaz lauded the dedication of FBR officials and staff involved in the reform process and mandated the finalisation of actionable, time-bound targets for presentation the following week.

The prime minister acknowledged that while the achievement of targets is encouraging, sustained efforts are essential. He underscored that FBR’s digitization has facilitated progress toward objectives and that efforts must now concentrate on establishing a robust and enduring system.

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PM Shehbaz directed the implementation of enhanced enforcement measures to combat the informal economy.

Furthermore, he called for the creation of a detailed roadmap for the restructuring of FBR’s Digital Wing, complete with a timeline for achieving specified goals.

The prime minister emphasised the significance of consulting all stakeholders and incorporating their insights into the reform process. He also stressed that prioritizing the facilitation of businesses, traders, and taxpayers should be central to the implementation of FBR reforms.