Karachi, April 30, 2025 – The State Bank of Pakistan (SBP) has expressed concern over the performance of the Federal Board of Revenue (FBR), particularly in relation to the declining number of sales tax filers on the Active Taxpayers List (ATL).
In its latest report on fiscal performance, the SBP questioned the FBR’s administrative effectiveness, highlighting a significant drop in registered sales tax filers.
According to the SBP, only 1.18 million taxpayers were added to the sales tax ATL during the first six months of fiscal year 2024–25. This marks a decline compared to 1.33 million filers during the same period last year. The SBP noted that despite the government introducing various tax measures in the previous budget, the FBR failed to meet its indirect tax collection targets. The result was a considerable shortfall of approximately Rs384 billion in overall tax revenues.
The SBP attributed this shortfall to a combination of macroeconomic factors and weak administrative performance by the FBR. It noted that projections used by the FBR while preparing the fiscal framework—particularly for GDP growth, inflation, imports, and large-scale manufacturing (LSM)—turned out to be overly optimistic. Lower-than-expected imports in Pakistani rupee terms directly impacted sales tax collections at the import stage, as well as revenues from customs duties.
Furthermore, the SBP emphasized that part of the underperformance could also be blamed on the FBR’s lack of effective enforcement and weak compliance mechanisms. “Insufficient administrative efforts to mobilize revenue remain a major concern,” the SBP stated, urging the FBR to improve taxpayer outreach and compliance enforcement.
This is not the first time the SBP has flagged issues with the FBR’s tax collection strategies. The central bank has repeatedly advised strengthening institutional coordination and data integration between the SBP and FBR to better monitor economic activities and widen the tax base.
With tax revenues falling short and the sales tax ATL shrinking, the SBP has made it clear that the FBR must ramp up its efforts to enhance compliance and modernize its tax administration to support fiscal sustainability in the coming months.