Pakistan's Federal Board of Revenue (FBR) collected Rs13 trillion ($46.7 billion) in taxes during fiscal year 2025-26, fully meeting its revised tax target, Finance Minister Muhammad Aurangzeb announced on Wednesday. The bureau also paid refunds amounting to Rs599 billion ($2.1 billion), marking a 21 percent increase over the previous year.
Record Tax Collection and Refunds
According to Radio Pakistan, the FBR collected Rs13.601 trillion in gross taxes, with net tax collection reaching Rs13.003 trillion after refunds of Rs597 billion. The original revenue target of Rs13,000 billion ($46.33 billion) was revised downward in consultation with the International Monetary Fund, as explained by Finance Adviser Khurram Schehzad. The revision accounted for inflation volatility, changing growth dynamics, domestic challenges like floods, and international geopolitical developments such as the US-Iran war.
“When we started this journey, our revenue collection was approximately 60 trillion [$215.8 billion],” Aurangzeb told senior FBR members at the bureau’s headquarters in Islamabad. “And Alhamdulillah, last night when you finished, exceeded 13 trillion [$46.76 billion].”
AI-Led Overhaul of FBR
Aurangzeb vowed that the government’s newly approved operating model for FBR would accelerate institutional transformation through reforms centered on people, processes, and technology, including expanded use of artificial intelligence and digital systems. The Finance Division stated that the modern tax administration must focus not only on revenue collection but equally on taxpayer facilitation, transparency, and public trust.
The finance minister emphasized that a country with over 250 million people must “deal with the tax authority.” He called for technology-driven solutions, greater automation, improved taxpayer services, and reduced opportunities for discretion and corruption. “People’s complaints, whether it’s around corruption, whether it’s around facilitating payments, whatever,” he said. “It takes two hands to clap.”
Tax-to-GDP Ratio Remains Low
Pakistan has undertaken tax reforms in recent years to broaden the tax net without imposing additional burdens on existing taxpayers. Despite the record collection, Pakistan’s tax-to-GDP ratio remains around 10 percent, one of the lowest in the world. The FBR’s performance in FY2025-26 reflects progress, but structural challenges persist.
