Rashid Mahmood Langrial, Chairman of the Federal Board of Revenue (FBR), has announced plans to introduce new legislation aimed at making shopping more challenging for individuals who fail to file their tax returns.
Speaking at ThinkFest, Langrial criticized the widespread culture of tax evasion in Pakistan and highlighted the need for significant reforms in the tax system.
According to FBR Chairman, many individuals who are legally obligated to pay taxes are not fulfilling their responsibilities. He pointed out that issues exist on both sides of the system—taxpayers and tax collectors. Additionally, he emphasized that the country’s tax rates are not correctly structured, leading to inefficiencies and inequalities in revenue collection.
The proposed law seeks to target non-filers, making it more difficult for them to engage in regular shopping activities. FBR chief expressed frustration over the prevalence of tax evasion, noting that even individuals offering advice on fixing the system often turn out to be tax-evaders themselves. He reiterated the need for accountability and proper enforcement mechanisms.
The FBR faced a significant tax shortfall of Rs386 billion from July to December. During this period, the revenue collection totaled Rs5,623 billion, falling short of the target of Rs6,009 billion set by the International Monetary Fund (IMF).
Despite this shortfall, Langrial remained optimistic about achieving the revenue target of Rs13,500 billion for the current fiscal year.
FBR chairman argued that Pakistan’s tax rates need adjustment to ensure fairness and efficiency. He explained that the tax system is designed to include the wealthiest 5% of the population but has struggled to achieve this goal. While the salaried class is consistently taxed, authorities have been less successful in collecting taxes from affluent individuals. The FBR chief acknowledged the need to reduce tax rates on certain items while expanding the tax net.
Additionally, Langrial revealed that over 0.4 million retailers have been added to the tax net this year, though many have yet to disclose their monthly income. He also stressed the importance of curbing the smuggling of petroleum products, which contributes to significant revenue losses.