Islamabad, December 26, 2024 – Finance Minister Mohammad Aurangzeb revealed on Thursday that the Federal Board of Revenue (FBR) had identified approximately 190,000 individuals who have evaded taxes totaling around Rs 60 billion. This was part of the government’s ongoing efforts to improve tax compliance and expand the tax base through digitization and data analytics.
The finance minister detailed that through the use of advanced algorithms to compile consumer data, the FBR had uncovered a group of 190,000 non-filers living high-standard lifestyles, owning luxury vehicles and properties, yet failing to pay taxes. After refining this data, field staff conducted a verification process for the top 5,000-6,000 individuals, confirming tax liabilities amounting to Rs 7 billion. With continued efforts, the FBR projects that this group alone could account for Rs 50-60 billion in additional tax revenue if brought into the tax net.
This announcement was made during a joint press conference featuring Finance Minister Aurangzeb, Minister for Information and Broadcasting Attaullah Tarar, Minister of State for Finance and Revenue Ali Pervaiz Malik, and FBR Chairman Rashid Mahmood Langrial.
Aurangzeb emphasized that the government had prioritized economic reforms, particularly in the taxation sector, since assuming power. One of the core goals is to increase the country’s tax-to-GDP ratio from the current 9-10% to 13%, a target that would significantly strengthen the fiscal position and enhance Pakistan’s reputation as a responsible global actor.
To achieve this, the government has introduced a bill in the National Assembly to ensure full tax compliance, focusing on eliminating issues related to non-declaration and under-declaration of income. In addition, the FBR has implemented a comprehensive digital transformation initiative aimed at improving transparency, reducing human intervention, and curbing corruption within the tax system.
The digitization project, launched in March 2024 and approved in September, is currently in its implementation phase. The project aims to integrate key economic sectors to plug tax leakages and enhance revenue collection.
Minister of State for Finance Ali Pervaiz Malik highlighted that expanding the tax base and transitioning from indirect to direct taxation are central to the national tax strategy. The strategy also incorporates modern tools, such as algorithms and data analytics, to encourage tax compliance and facilitate a more equitable tax regime.
Additionally, a task force has been formed to improve institutional capacity, with experts from IT, academia, data analysis, and business sectors working alongside the FBR. This collaboration has led to the creation of dashboards that strengthen efforts to ensure tax compliance.
FBR Chairman Rashid Mahmood Langrial reiterated the authority’s commitment to digitizing the tax system and automating its processes to improve efficiency. He revealed that, of the 190,000 identified non-filers, only 38,000 have filed their returns, contributing Rs 370 million in taxes. Notices have been issued to the remaining 169,000 wealthy non-filers, and the FBR aims to bring them into the tax system through continued efforts and enforcement measures.
The FBR’s data analysis systems have also evolved significantly, with a focus on closing the Rs 7.1 trillion tax gap. Currently, out of the top five percent of earners (3.3 million individuals), only 600,000 have filed their tax returns, a gap the FBR is working to address.
Overall, the government’s efforts to digitize the tax system, expand the tax base, and enforce stricter compliance measures are seen as essential steps toward strengthening Pakistan’s fiscal health and ensuring a more transparent and efficient tax system.