Finance Minister Urges FBR to Boost Tax-to-GDP Ratio

Finance Minister Urges FBR to Boost Tax-to-GDP Ratio

In a concerted push to enhance Pakistan’s tax-to-GDP ratio, Finance Minister Muhammad Aurangzeb emphasized the need for innovative strategies during a review meeting at the Federal Board of Revenue (FBR) headquarters on Friday.

The session, attended by FBR Chairman and board members, as well as Attorney General Mansoor Usman Awan, aimed to scrutinize the revenue body’s performance and identify areas for potential improvement in the current financial year 2023-24.

The Finance Minister’s call for an increased tax-to-GDP ratio comes at a time when Pakistan is grappling with fiscal deficits and seeking ways to stabilize its economic foundations. Aurangzeb, expressing his views on the current revenue system, stressed the importance of broadening the tax base and adopting advanced digital solutions to ensure a more efficient collection process. We need to enhance our efforts not only in meeting this year’s targets but also in laying down a robust foundation for sustainable fiscal growth, stated Aurangzeb.

During the meeting, the Chairman of FBR provided an extensive overview of the ongoing efforts and challenges faced in tax collection. He highlighted the steps being taken towards the digitalization of the FBR, which is expected to improve performance and transparency significantly. The digital transformation is anticipated to streamline processes and prevent the leakage of revenue through systemic inefficiencies.

Further discussions in the meeting touched upon the issues related to pending legal cases which have tied up substantial amounts of revenue. It was unanimously agreed upon to formulate a comprehensive strategy to expedite these cases, thereby facilitating quicker recovery of revenues that are crucial for the country’s economic health.

The urgency to optimize revenue collection mechanisms comes in the backdrop of Pakistan’s struggling economy, with recent data showing a lagging tax-to-GDP ratio compared to other nations in the region. Improving this metric is crucial as it reflects the government’s ability to fund essential services and development projects through its own revenue streams without excessive reliance on external borrowing.

Legal experts like Attorney General Mansoor Usman Awan, who was present at the meeting, underscored the importance of resolving the pending cases to unlock funds that could be pivotal in meeting the fiscal targets set for the year. “Resolving these legal battles swiftly can provide an immediate boost to our revenue streams,” Awan noted.

As the meeting concluded, there was a collective resolve among the attendees to implement the proposed strategies diligently. The Finance Minister’s proactive stance is seen as a vital step towards reshaping Pakistan’s fiscal landscape, aiming for a broader tax base and higher compliance rates that will ultimately fortify the nation’s economic sovereignty.