ISLAMABAD: The Senate Standing Committee on Finance and Revenue raised concerns about the effectiveness of training programs for Federal Board of Revenue (FBR) officers during the past two decades, following a significant revenue shortfall reported by the FBR. The committee, led by Senator Saleem Mandviwala, sought detailed insights into the outcomes of these training initiatives.
This questioning comes after the FBR reported a Rs384 billion revenue gap for the first half of the fiscal year 2025. While the FBR collected Rs5,624 billion in taxes, it fell short of the Rs6,008 billion target. Despite a slight increase in Pakistan’s tax-to-GDP ratio to 10.8% in Q2, it still lags behind the IMF target of 13.6% by year’s end, and is far behind India’s ratio of 18%.
Senator Mandviwala expressed frustration over the FBR’s sales tax collection efforts, criticizing the agency’s resistance to implementing tax collection on certain goods. Meanwhile, Finance Minister Muhammad Aurangzeb highlighted ongoing reforms, including simplifying income tax forms and promoting transparency through technological innovations such as the faceless system in Customs.
Further raising concerns, Senator Faisal Vawda questioned the procurement of 1,010 vehicles by the FBR, claiming that the contracted company had been raided and alleging threats to his life from FBR officers. Both FBR Chairman Rashid Mahmood Langrial and Finance Minister Aurangzeb vowed to investigate the matter thoroughly, with Langrial announcing that the procurement process would be suspended until a full review is completed.
The committee also discussed the possibility of converting certain taxes into a carbon tax, a proposal put forward by Senator Sherry Rahman. While acknowledging the environmental benefits, some members expressed concerns about the potential impact on inflation and the poor.
The meeting underscored the need for reforms to reduce administrative burdens on taxpayers while ensuring that tax collection remains efficient and equitable.
