Islamabad, July 1, 2025 – In a landmark achievement that signals a turning point in Pakistan’s fiscal journey, the Federal Board of Revenue (FBR) has finally shattered a decades-old barrier by securing a double-digit tax-to-GDP ratio for the fiscal year 2024-25 — a feat last witnessed generations ago.
Although the FBR narrowly missed its ambitious annual revenue collection target, it nonetheless delivered an astounding Rs11.72 trillion in revenue, marking a historic rise in the tax-to-GDP ratio. According to the freshly released budget documents for 2025-26, the nominal GDP has been revised to Rs114.69 trillion for 2024-25 — pushing the ratio of tax collection to GDP beyond the 10 percent mark for the first time since 1999.
For over two decades, the FBR’s tax efforts consistently languished in the single digits, frustrating policymakers and stifling economic reform. Despite a growing GDP, the ratio of tax collection to overall economic activity remained alarmingly low — 8.5 percent in 2022-23, and 8.8 percent in 2023-24. This chronic underperformance was viewed as a major obstacle to Pakistan’s financial sovereignty.
But the tide has turned.
The FBR’s performance in FY2024-25 is a testament to the agency’s aggressive reforms, broadened tax base, and relentless pursuit of compliance. Despite facing criticism for missing the original tax collection target of Rs12.913 trillion — which was subsequently revised down to Rs11.90 trillion — the FBR delivered where it matters most: elevating the GDP ratio of tax revenue to an impressive double-digit zone.
Critics often overlook the fact that the FBR’s targets were set based on inflated GDP projections, which were later adjusted downward. Still, the FBR managed to collect more in real terms, pushing the tax-to-GDP ratio to a decade-defying benchmark.
For FY2025-26, the FBR now faces a daunting new challenge: a record Rs14.13 trillion revenue target. However, with momentum on its side and a renewed focus on transparency, digitalization, and enforcement, the agency is poised to raise the FBR-to-GDP ratio to 11% — a goal that, until recently, seemed unimaginable.
This breakthrough marks a new chapter in Pakistan’s economic story — one where the FBR, long seen as a weak fiscal link, emerges as a driver of sustainable growth and resilience through an empowered GDP ratio.