The International Monetary Fund (IMF) has reviewed the Federal Board of Revenue’s (FBR) plan to expand the tax net for retailers and implement the Compliance Risk Management (CRM) framework as part of efforts to generate Rs250 billion in additional revenue, according to a news report.
The measures, discussed during the ongoing IMF review mission in Islamabad, come amid a Rs604 billion revenue shortfall in the first eight months of the fiscal year.
The Tajir Doost Scheme is central to the FBR’s drive to bring retailers into the tax system, alongside CRM enforcement at Large Taxpayer Units (LTUs) in Islamabad, Karachi, and Lahore. The FBR has also integrated its data with 145 agencies under documentation laws and is expanding the compliance improvement plan across 36 more cities.
To strengthen tax enforcement, the FBR is introducing AI-driven audits, selecting 3-5% of six million tax returns for review, though full implementation will take time. Independent auditors have also been hired. Other measures include digital invoicing, track-and-trace mechanisms, and stricter enforcement to curb tax evasion.
The IMF is also assessing Pakistan’s tax penalty structure to design a General Anti-Avoidance Rule (GAAR) for improved compliance.
Meanwhile, discussions continue on broader fiscal adjustments for 2024-25 and the framework for the 2025-26 budget, with negotiations potentially extending until the budget’s approval by Parliament if an agreement is not reached at the staff level.
