Experts urge FBR to broaden tax base to meet FY26 target
Pakistan's numbers tell a compelling story with only 5.9 million tax filers out of 71 million workforce (8.4 percent, tax filer to workforce ratio), while banks hold 177 million accounts, with 137 million unique account holders (60% of adult population), and Rs32.7 trillion in deposits (as of May 2025)—all with complete KYC data with the Banks. These
figures were shared by former minister for Interior and Commerce GoharEjaz on X formerly known Twitter.
He sated FBR needs help to find non-tax filers. This is where they need to look: total tax filers in Pakistan 5.9 million (2024-25), individuals (5.8 million), Business Partnerships (AOPs) ( 104,269) and companies (87,900).
Ejaz further stated that FBR doesn't need to tax existing filers more—it needs to expand the tax base. With withholding taxes at Rs. 1.59 trillion and voluntary payments at Rs. 1.12 trillion (first half of 2024-25), the compliant are already contributing. 137 million unique bank account holders vs 5.9 million tax filers is a stark low number, he added.
FBR must target non-filers—going after existing taxpayers will not work as they're already overburdened. Banks have comprehensive KYC data on account holders with substantial deposits. Non-filers' complete account details, transaction histories, and financial profiles are readily available.
Smart governance means using available data intelligently. The path to Pakistan's revenue targets lies not in over-burdening the 5.9 million compliant taxpayers, but in identifying and bringing the remaining 131 million bank account holders with significant financial footprints into the formal tax system, Ejaz added.
Copyright Business Recorder, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
3 hours ago
- Business Recorder
‘Pakistan needs integrated dry port strategy to decentralise economic activity'
LAHORE: Pakistan must adopt an integrated dry port strategy to decentralize economic activity, facilitate upcountry traders' access to local ports, reduce logistics costs, and enhance global competitiveness, said customs experts. This requires collaboration among stakeholders, including the Federal Board of Revenue, Pakistan Railways, Ministry of Commerce, and trade associations, they added. These circles have proposed to utilize Pakistan Railways for inland cargo movement to reduce congestion and road traffic while focusing on Lahore, Multan, KP (Peshawar), and Gwadar ports for Phase-1 implementation. To this effect, they stressed to implement digital customs, smart logistics systems, and real-time tracking to enhance efficiency and transparency. It may be noted that Pakistan's dry ports are poised to revolutionize the country's economy by enhancing trade facilitation, economic development, and regional connectivity. Strategically located inland terminals connected to seaports via road or rail, dry ports can significantly boost trade efficiency, reduce logistics costs, and increase global competitiveness. Speaking about key benefits of dry ports, these experts said dry ports can minimize demurrage charges, delays, and transportation bottlenecks by shifting cargo processing inland. Also, they added, dry ports can generate employment opportunities in logistics, customs, warehousing, and transport, stimulating industrial development and creating Special Economic Zones (SEZs) under the China-Pakistan Economic Corridor (CPEC). Besides, dry ports promote seamless connectivity between road, rail, and sea, ensuring efficient transportation and reducing costs, they stressed. Regarding current challenges, they said, the absence of a comprehensive national dry port policy hinders the growth and development of dry ports. According to them, congested Karachi ports and limited customs authority at dry ports lead to unnecessary delays and inefficiencies. In addition, poor coordination among stakeholders, including customs, shipping lines, railways, and freight forwarders, affects the smooth operation of dry ports. Copyright Business Recorder, 2025
Business Recorder
3 hours ago
- Business Recorder
Futures spread expands sharply
KARACHI: The futures market at the Pakistan Stock Exchange (PSX) witnessed a sharp expansion in spreads during the week ended July 4, 2025, with the future spreads soaring by 5,825 basis points. The spread settled at positive 9.99 percent by the final trading session of the week, compared to a negative 48.25 percent in the preceding week, reflecting improved investors sentiments. On the activity front, however, the average daily futures volume stood at 180.39 million shares, registering a sharp decline of 48.5 percent from the previous week's 349.98 million shares. In value terms as well, the average daily turnover dropped by 57.8 percent, declining to Rs 7.91 billion from Rs 18.78 billion a week earlier, indicating reduced participation in high-value contracts despite increased spreads. Copyright Business Recorder, 2025
Business Recorder
3 hours ago
- Business Recorder
CTBCM: Commercial operations may begin by Sept-end
ISLAMABAD: The Power Division has assured representatives of nearly a dozen development partners that commercial market operations of the Competitive Trading Bilateral Contract Market (CTBCM) are expected to begin by the end of September 2025. This development will enable bulk power consumers (BPCs) — those with demand of 1 MW and above — to procure electricity through independent bilateral contracts with competitive suppliers, sources told Business Recorder. According to the Power Division, the framework for viable open access charges (wheeling) and a transparent process for the allocation of wheeling quantum is at an advanced stage of finalization. The operationalisation of the Independent System & Market Operator (ISMO) will play a key role in facilitating CTBCM implementation. Electricity market under CTBCM: Power Div invites comments from stakeholders During a meeting with development partners, the following key issues were discussed: (i) updates on power sector reforms; (ii) proposed industrial and agriculture package, pricing reforms, and grid capacity/utilization strategy ; and (iii) distribution sector reforms, including private sector participation, investment readiness, and future action plans The Power Division informed participants that capacity costs—denominated in USD—have surged from Rs 11.1/kWh to Rs 18.8/kWh, primarily due to the depreciation of the Pakistani Rupee. However, fuel costs have remained stable due to the addition of lower-cost generation capacity. The government emphasized that de-linking capacity costs from currency depreciation and increasing reliance on indigenous energy sources are critical to long-term sustainability. Electricity tariffs remain inflated due to extraneous taxes and duties, increasing the financial burden on end-users. The growing circular debt is attributed to both inefficiencies in the power sector and suboptimal debt pricing. Inefficient pricing has increased debt servicing costs, further burdening consumers and dampening demand. A structured roadmap to reduce circular debt is currently under development. The government recently launched the 'Bijli Sahulat package' for winter months, offering electricity at marginal cost plus a nominal margin. Another similar mechanism, based on marginal pricing, is being evaluated for industrial consumers to incentivize incremental grid usage through a subsidy-neutral framework. This initiative is expected to stimulate industrial and overall economic growth. Nepra has determined total fixed charges at Rs 2.505 trillion based on 106 billion units. A 5–10% drop in demand does not significantly reduce these charges due to their fixed nature, underscoring the importance of increasing consumption to improve cost recovery. To stimulate demand, a three-year package (March 2025–December 2027) has been proposed for industrial and agricultural sectors. It projects an increase of 3,745 MW in demand between March–June 2025, 10,720 MW in 2026, and 11,018 MW in 2027. The package offers a rate of Rs 22.98 per unit, yielding a Rs 10.50/unit saving for industrial users (from Rs 33.48) and Rs 7.77/unit for agricultural users (from Rs 30.75). The unified rate for both sectors is proposed at Rs 22 per unit. On broader power sector reforms, the Power Division noted that, for the first time in years, the government is actively pursuing long-term generation and transmission planning. A 10-year forward-looking plan is being developed to align generation with projected demand and reduce reliance on costly peaking plants. The government highlighted the need for improved data utilization and performance tracking through tools such as SCADA and AMI, to support predictive and transparent operations. The proposed package is based on marginal cost pricing for incremental consumption, while ensuring fixed cost recovery through base tariffs. The World Bank emphasized the need for a clear sunset clause (e.g., a 3-year limit with annual reviews), transparent marginal cost tracking, and avoidance of regressive subsidies. It also suggested incentives for off-peak and solar-hour industrial consumption. Power Division further shared that transmission projects are underway to increase northward evacuation capacity by 2,000 MW over the next 3–4 years. Development partners stressed the urgency of fast-tracking grid investments to meet the anticipated 25% industrial demand growth. Several projects currently stalled at planning or early implementation stages were flagged, with calls to resolve legacy design and execution bottlenecks. The rollout of 35 million AMI (Advanced Metering Infrastructure) meters and effective big data utilization will require change management and enhanced digital literacy within DISCOs. The newly licensed ISMO is preparing to commence operations by September 2025, enabling market-based trading. A phased market opening will begin with the establishment of wheeling charges and regulatory frameworks. The Energy Infrastructure Development and Management Company (EIDMC) will assume responsibility for planning and executing PSDP-funded transmission projects by FY26/27. Board approvals are in process, and CEO recruitment is expected by year-end. ISMO—formed by integrating technical teams from NTDC and CPPA-G—is now operationally structured and will manage market operations following its separation from NTDC. Development partners underscored the need for pricing predictability over the next 3–5 years, advocating for technology-neutral support policies, and cautioning against price discrimination that protects inefficient domestic industries. They also recommended: (i) finalize and publish wheeling charges and market rules by September; (ii) tracking and publishing marginal generation costs under the proposed package; (iii) accelerate implementation of key grid and metering infrastructure; and (iv) launching a structured dialogue with industry to co-develop a roadmap for energy policy and investment predictability. Copyright Business Recorder, 2025
