Islamabad, July 23, 2025 – Prime Minister Shehbaz Sharif on Wednesday reaffirmed his government’s commitment to comprehensive tax reforms and directed the Federal Board of Revenue (FBR) to intensify its efforts to bring the informal economy into the tax net.
Chairing a high-level review meeting on the progress of ongoing reforms in the FBR, Shehbaz Sharif lauded the recent accomplishments made by the revenue authority. However, he emphasized that these gains must be translated into long-term, sustainable improvements in tax collection and governance.
While acknowledging the reforms as “encouraging,” Shehbaz underscored that the ultimate goal is to establish a fully digitized, transparent, and business-friendly tax system. He noted that despite several milestones being achieved, “greater efforts are still required to overcome challenges such as undocumented transactions and informal economic activities.”
The prime minister issued clear directives to the FBR to accelerate the pace of digital transformation, restructure its IT and digital enforcement wings, and prepare a detailed roadmap to eliminate loopholes exploited by the informal sector. He also emphasized the need for meaningful consultations with stakeholders, including traders, industrialists, and the broader taxpayer community.
“Tax reforms should not just be about increasing revenue—they must ease compliance and reduce the burden on the honest taxpayer,” Shehbaz said.
Officials from the FBR briefed the prime minister on key achievements. The tax-to-GDP ratio saw a notable increase of 1.5% in FY2025, while the number of income tax filers rose sharply from 4.5 million to over 7.2 million by June 30. In addition, revenue from the retail sector surged by Rs. 455 billion, largely due to the integration of point-of-sale (POS) systems and stricter monitoring.
The implementation of a faceless customs clearance system was also highlighted, which has begun reducing clearance times drastically—from 52 hours to just 12. Further, a new digital case-hearing mechanism via video link has been launched to promote transparency and efficiency.
The meeting also heard that tariff reductions on imported raw materials are easing costs for local industries, thanks to policy measures aligned with reform targets.
Shehbaz directed the FBR to submit a detailed, time-bound action plan for the next phase of reforms by next week. He appreciated the dedication of FBR officials and reiterated that the modernization of tax administration is essential for Pakistan’s economic future.