FBR

PM Shehbaz Sharif Calls for Rapid Resolution of Rs 1.7 Trillion Tax Disputes

PM Shehbaz Sharif Calls for Rapid Resolution of Rs 1.7 Trillion Tax Disputes

March 6, 2024

Islamabad, March 6, 2024 – Prime Minister Shehbaz Sharif has directed authorities to expedite the resolution of legal disputes preventing the recovery of Rs 1.7 trillion in tax revenue. The directive came during a high-level meeting focused on restructuring the Federal Board of Revenue (FBR) and reforming the nation’s tax system.

The prime minister emphasized the urgency of addressing these disputes to support comprehensive economic reforms aimed at achieving robust growth of six to seven percent. To facilitate this process, PM Shehbaz instructed the Ministry of Law to propose the establishment of a legal department within the FBR to handle legal documentation and streamline tax recovery through efficient legal processes.

“We need a tax system that incentivizes businesses while reducing their tax burden,” said PM Shehbaz. “However, the business community must contribute to social progress in return.”

During the meeting, the prime minister highlighted the importance of implementing an effective third-party audit system and conducting a thorough review of all tax exemptions. He also emphasized the need to promote small and medium enterprises (SMEs) to support economic growth and prevent Pakistan from lagging behind in the global economy.

PM Shehbaz Sharif urged swift action, stating, “We cannot afford to waste time; the economic future of Pakistan is at stake.”

The meeting also addressed various proposals to improve transparency within the FBR, adopting international infrastructure standards, providing tax incentives to boost revenue, combating corruption and smuggling, separating inland revenue from customs, and reducing tax rates. The prime minister emphasized the importance of setting realistic targets and implementing the proposed roadmap within clear timelines.

Former caretaker minister for finance, Dr. Shamshad Akhtar, provided a detailed briefing on FBR restructuring, automation, and identifying loopholes in tax collection. She underscored the importance of increasing Pakistan’s tax-to-GDP ratio, which currently stands at just 9.5 percent. According to Dr. Akhtar, 55.6 percent of the population does not pay taxes, with only 3.3 percent contributing to the tax base. She recommended a long-term tax plan to ensure policy continuity and sustainable economic growth.

The prime minister praised Dr. Akhtar’s work and acknowledged the groundwork laid by Senator Ishaq Dar with the International Monetary Fund (IMF), which has facilitated further progress. The meeting was attended by Senators Ishaq Dar and Musadiq Malik, along with other high-ranking officials and leading banker Muhammad Aurangzeb, who joined via video link.

In summary, PM Shehbaz Sharif’s directives aim to accelerate the resolution of legal disputes that are obstructing tax recovery. This initiative is part of a broader effort to reform the FBR, encourage business growth, and support Pakistan’s economic recovery. By taking swift action, the government hopes to address the tax revenue shortfall and pave the way for a brighter economic future for Pakistan.