ISLAMABAD: Pakistan has failed to achieve a double digit tax-to-GDP ratio during past 22 years despite phenomenal growth in revenue collection over the years.
Official statistics released by Federal Board of Revenue (FBR), which has mandate to collect federal taxes, revealed that the tax to GDP ratio was recorded at 9.3 per cent in the fiscal year 2000-2001, which was remained stagnant at 9.2 per cent for the year ended 2021-2022.
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The total GDP size has recorded a robust growth to Rs66.95 trillion for the fiscal year 2021-2022 when compared with 4.21 trillion in the fiscal year 2000-2001.
Similarly, the revenue collection by the FBR recorded massive growth to Rs6.15 trillion for the fiscal year 2021-2022 when compared with Rs392.28 billion in the fiscal year 2000-2001.
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Complete data can be viewed in the following table:
| YEARS | GDP (Rs in Million) | Net Collection (Rs in Million) | Tax-to-GDP ratio |
| 2000-01 | 4,209,873 | 392,277 | 9.3 |
| 2001-02 | 4,452,654 | 404,070 | 9.1 |
| 2002-03 | 4,875,648 | 460,627 | 9.4 |
| 2003-04 | 5,640,580 | 520,843 | 9.2 |
| 2004-05 | 6,499,782 | 590,387 | 9.1 |
| 2005-06 | 8,216,160 | 713,442 | 8.7 |
| 2006-07 | 9,239,786 | 847,236 | 9.2 |
| 2007-08 | 10,637,772 | 1,008,091 | 9.5 |
| 2008-09 | 13,199,707 | 1,161,150 | 8.8 |
| 2009-10 | 14,866,996 | 1,327,382 | 8.9 |
| 2010-11 | 18,276,440 | 1,558,014 | 8.5 |
| 2011-12 | 20,046,500 | 1,882,693 | 9.4 |
| 2012-13 | 22,385,657 | 1,946,360 | 8.7 |
| 2013-14 | 25,168,805 | 2,254,531 | 9.0 |
| 2014-15 | 27,443,022 | 2,589,978 | 9.4 |
| 2015-16 | 32,725,049 | 3,112,472 | 9.5 |
| 2016-17 | 35,552,819 | 3,367,874 | 9.5 |
| 2017-18 | 39,189,810 | 3,843,755 | 9.8 |
| 2018-19 | 43,798,401 | 3,828,482 | 8.7 |
| 2019-20 | 47,540,409 | 3,997,408 | 8.4 |
| 2020-21 | 55,795,515 | 4,744,997 | 8.5 |
| 2021-22 | 66,949,907 | 6,148,496 | 9.2 |
The FBR in a report said that in Pakistan, although the tax to GDP ratio has been low compared to other regional countries yet if viewed over the past so many years this ratio has significantly increased.
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“The tax to GDP ratio was 4.4 percent in 1950 which increased to 9.2 percent in 2022. The continuing reform efforts are expected to further increase the Tax-to-GDP ratio in coming years.”
The FBR said that during early 50s, the main revenue collection source was the Customs Duty which was contributing 66 per cent of the total revenue while direct tax and sales tax was contributing only 12 per cent and 14 per cent of revenue respectively.
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Over the years the tax mix changed drastically. By 1995, Customs Duty share had reduced from 66 per cent to 34 per cent percent of the total revenue while direct tax and sales tax’s contribution increased to 27 per cent and 19 per cent respectively.
Tax mix further changed during last two decades. By 2022, share of Sales Tax increased to 41 per cent & Direct Tax’s 37 per cent while the share of Customs Duty declined to 17 per cent.
