Karachi, January 20, 2025 – The Federal Board of Revenue (FBR) is intensifying its efforts to boost tax collection and expand the tax base as part of the formulation of the federal budget for 2025-26.
Sources within the FBR have indicated that the budget is expected to be announced in the first or second week of June 2025. To ensure comprehensive and effective measures, the FBR has invited stakeholders to contribute tax proposals aimed at enhancing revenue generation and broadening the tax net.
Focus Areas for Budget 2025-26
In its directives, the FBR has outlined several key areas to guide stakeholders in shaping their proposals. These include:
1. Expanding the Tax Base: A significant emphasis is placed on broadening the tax base to encourage wider participation in revenue generation efforts. This approach aims to identify and include more individuals and businesses that currently remain outside the tax net.
2. Integrating the Value Chain: Stakeholders have been advised to propose policies that bring the entire value chain of all businesses under the General Sales Tax (GST) regime, ensuring uniformity and improved tax compliance.
3. Promoting Progressive Taxation: The FBR seeks measures to enhance progressive taxation, ensuring that wealthier segments of society contribute a fairer share to national revenue.
4. Phasing Out Concessions and Exemptions: To create a level playing field, the FBR plans to gradually eliminate tax concessions and exemptions under all tax laws.
5. Facilitating Taxpayers: Simplifying tax laws and removing redundant provisions are key priorities. The FBR aims to improve ease of doing business and foster a taxpayer-friendly environment.
6. Reducing Tax Arbitrage and Anomalies: Proposals are encouraged to address tax distortions, procedural inefficiencies, and loopholes to ensure neutrality in taxation and promote economic efficiency.
The FBR has urged stakeholders to submit clear, actionable, and implementable proposals, including suggestions for additions, deletions, or amendments to existing tax laws. The deadline for submissions is January 31, 2025.
This proactive approach highlights the FBR’s commitment to strengthening Pakistan’s tax system, improving compliance, and mobilizing resources for sustainable economic growth. By involving stakeholders in the process, the FBR aims to create a budget that addresses systemic challenges while fostering trust and collaboration.