Islamabad, January 25, 2026 – Chairman of the Federal Board of Revenue (FBR), Rashid Langrial, has said that people who have installed air conditioners should be brought into the tax net, stressing that widening the tax base is essential for stabilizing Pakistan’s economy.
Speaking at a panel discussion during Afkaar-e-Taza Thinkfest 2026 at Alhamra, the FBR chairman said Pakistan has around 42 million households, and nearly seven percent of them have air conditioners installed. He maintained that all such households reflect a certain level of income and should therefore be part of the tax system. Former finance minister Miftah Ismail and Chairman Interloop Mosaddiq Zulqarnain were also present at the session.
Rashid Langrial said it is not possible to strengthen the economy without expanding the tax net, adding that while some citizens pay taxes honestly, a large segment continues to avoid compliance. He pointed out that 4.9 million people filed tax returns in FY2025, which has increased to 5.9 million filers in the current fiscal year. However, he termed it alarming that 320,000 individuals declared themselves non-taxable, highlighting serious compliance issues.
The FBR chairman noted that Pakistan’s tax-to-GDP ratio remains lower than other regional countries primarily due to a limited tax base and weak compliance. As a result, the tax burden falls disproportionately on a few segments of society.
He said the salaried class bears the highest tax burden because their income is fully documented. According to him, the tax rate on salaries goes up to 35 percent in certain slabs, including for individuals earning around Rs4.1 million annually. He added that compared to regional economies, Pakistan’s salaried class faces relatively higher taxation. For an annual income of Rs10 million, the average tax rate is about 27 percent, but the real challenge remains low compliance rather than high rates.
Rashid Langrial said that bringing more people into the tax net could allow the government to reduce tax rates. He shared that out of 176,000 doctors in Pakistan, only 55,000 filed tax returns, while 39,000 declared annual incomes below Rs2 million, resulting in minimal tax payments—an issue he described as deeply concerning.
Explaining fiscal pressures, the FBR chairman said that under the NFC Award, a large portion of tax revenue goes to provinces. Out of every Rs100 collected, only Rs38 remains with the federal government, while Rs58 is transferred to provinces, limiting federal fiscal space.
During the discussion, Mosaddiq Zulqarnain said the salaried class consistently pays taxes, while compliance in the corporate sector is uneven. He called for a 25 percent tax relief for salaried individuals. Responding to this, Rashid Langrial described Zulqarnain as a “gold-plated taxpayer” who pays taxes honestly.
The FBR chairman also clarified that there should be no separate tax regime for exporters, stating that the authority is moving towards a normal tax regime. He warned that companies submitting incorrect tax returns would face audits.
Rashid Langrial said the FBR is undergoing institutional reforms to improve revenue collection and accountability. With 17,000 employees, the organisation is strengthening internal oversight. He added that improved monitoring of sugar mills and effective checks have already generated billions of rupees in additional revenue.
He further revealed that CSS officers have been arrested on corruption charges within the FBR, demonstrating the institution’s seriousness about accountability. He reaffirmed his commitment to building a transparent, fair, and effective tax system, ensuring that the tax burden is shared equally by all capable citizens rather than falling solely on the salaried class.
The FBR chairman concluded by reiterating that reforms will continue to expand the tax net, improve compliance, and ensure fairness, so that every able-bodied person contributes their due share to the national exchequer.