Islamabad – The Federal Board of Revenue (FBR) has launched an initiative to modernize Pakistan’s taxation framework by inviting innovative, evidence-based proposals from Inland Revenue (IR) offices across the country. The objective is to broaden the tax base, improve compliance, and optimize revenue collection in preparation for the 2024–25 federal budget.
This strategic move reinforces FBR’s commitment to fostering fiscal innovation, simplification, and transparency while ensuring that taxation keeps pace with evolving business practices and economic trends.
Key Focus Areas of the Initiative
In an official circular issued to IR offices, the FBR has requested comprehensive and actionable proposals addressing the following major tax domains:
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Income Tax Ordinance, 2001
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Sales Tax Act, 1990
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Federal Excise Act, 2005
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ICT (Tax on Services) Ordinance, 2001
These reforms are particularly aimed at expanding the tax net to under-taxed or informal sectors, removing legislative ambiguities, and plugging administrative loopholes that hinder revenue collection.
Objectives of the FBR’s Innovation Drive
The FBR has urged tax officers and policy stakeholders to submit suggestions that are:
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Practical: Easily implementable within the current administrative framework
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Inclusive: Sensitive to trade associations, MSMEs, and emerging industries
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Forward-looking: Aligned with digital transformation and global best practices
Key focus areas include:
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Combatting tax avoidance and evasion
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Closing loopholes in existing tax statutes
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Introducing procedural simplifications to reduce compliance burden
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Encouraging digital tax administration and voluntary compliance
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Removing obsolete clauses in tax laws to reflect modern commerce and services
Call for Stakeholder-Centric Proposals
IR offices have been asked to consult with trade bodies, chambers of commerce, tax bar associations, and technology experts to ensure that all proposals are holistic and grounded in stakeholder realities.
Special emphasis is being placed on:
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Including high-growth digital sectors (e.g., freelancers, e-commerce, digital platforms)
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Proposing mechanisms for real-time data integration with third-party platforms (banks, NADRA, utility companies)
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Aligning tax policies with economic revival goals and public confidence
Deadline and Next Steps
The deadline for submitting proposals is March 11, 2024. IR offices have been instructed to:
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Conduct gap analyses of their regional tax performance
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Evaluate sectoral contribution versus potential
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Recommend both legislative amendments and procedural reforms
Once submitted, the proposals will be reviewed by FBR’s Policy Wing, which will then compile prioritized recommendations for inclusion in the upcoming Finance Bill 2024–25.
Broader Impact and Strategic Vision
This move reflects the FBR’s broader mission to:
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Enhance Pakistan’s domestic resource mobilization
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Build a trust-based, technology-driven tax ecosystem
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Reduce dependency on indirect taxes through direct taxation of high-potential segments
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Create a fairer tax structure aligned with the principles of equity and growth
The FBR has reiterated that improving tax compliance and increasing the revenue-to-GDP ratio remain cornerstones of Pakistan’s economic stability program.
Conclusion
The FBR’s invitation for innovative taxation proposals marks a critical step toward modernizing Pakistan’s fiscal infrastructure. By actively engaging with IR offices and encouraging multi-stakeholder input, the government aims to develop a more transparent, efficient, and equitable tax system.
At Sterling.pk, we support organizations and professionals in:
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Understanding proposed tax law changes
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Preparing consultation responses
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Navigating upcoming compliance frameworks
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Aligning business strategy with fiscal developments
