Prime Minister Shehbaz Sharif announced that the government is accelerating reforms within the Federal Board of Revenue (FBR) after the tax authority surpassed its Rs12.957 trillion ($46.6 billion) revenue target for the previous fiscal year, his office said on Thursday.
Record Revenue Collection
Finance Minister Muhammad Aurangzeb announced on Wednesday that the FBR’s revenue collection for fiscal year 2025-26 exceeded Rs13 trillion ($46.76 billion), surpassing its Rs12.957 trillion target. The achievement marks a significant milestone for Pakistan’s tax authority, which has been under pressure to enhance collection and broaden the tax base.
During a meeting with a delegation of FBR officers in Islamabad, Sharif congratulated them on meeting the revenue targets. He highlighted that the FBR had paid Rs600 billion ($2.16 billion) in tax refunds during FY 2025–26, which facilitated the business community and helped promote exports.
Reforms and Digitalization
“The pace of ongoing FBR reforms is being accelerated further,” Sharif was quoted as saying by the Prime Minister’s Office (PMO). “Expanding the tax base, increasing transparency, and improving services for taxpayers remain the top priorities of FBR reforms.”
The premier explained that the FBR’s new operating model will be based on a digital, faceless tax administration system with minimal human intervention or involvement. This shift toward automation aims to reduce corruption and improve efficiency. Pakistan has attempted to introduce reforms within the FBR in recent years to enhance tax collection and move toward a tax system with minimal human interaction, using automated processing that the FBR refers to as a “faceless” system.
Future Targets and Warnings
Sharif expressed hope that FBR field formations and officers would achieve this year’s tax target of over Rs15 trillion ($53.96 billion) through the same dedication and efforts. However, he warned FBR officers against committing excesses, urging them to prioritize facilitating taxpayers, the business and industrial community.
“There is no place for corrupt elements in the FBR,” Sharif said.
Regional Performance
The PMO statement said that the Karachi Large Taxpayer Unit, a regional office of the FBR, collected Rs528 billion ($1.9 billion) while the Lahore Large Taxpayer Unit collected Rs261 billion ($0.94 billion) during FY26.
Economic Context
Pakistan has eyed increasing its tax revenue in line with recommendations of the International Monetary Fund (IMF) as it eyes sustainable economic growth. At around 10 percent, Pakistan’s tax-to-GDP ratio remains among the lowest in the world, underscoring the need for sustained reform and digitalization efforts.
