FBR expects Rs5.5 trillion additional revenue through documentation, digital reforms: Langrial

Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial has said the tax authority expects to generate around Rs5.5 trillion in additional revenue through documentation of the economy, digitalisation and measures aimed at bringing untaxed sectors into the tax net.

Speaking to a private news channel, Langrial said the government’s tax reforms are focused on improving fairness, transparency and compliance rather than merely increasing revenue collection.

He said a large portion of Pakistan’s economy, particularly the wholesale and retail sectors, remains outside the documented tax system, limiting the government’s ability to collect taxes effectively. 

According to Langrial, nearly 70% of economic activity is still undocumented.

The FBR chairman said digitalisation has become a key component of the government's tax strategy. He noted that recently introduced digital monitoring systems are expected to generate about Rs60 billion in additional revenue, while reforms in the wholesale and retail sectors could contribute between Rs40 billion and Rs45 billion by the end of the current fiscal year.

Langrial said the FBR is expanding digital monitoring mechanisms at the federal, provincial and district levels and rolling out a digital invoicing system to automatically record sales, purchases and business transactions.

He said the initiative would enhance transparency and reduce the need for direct enforcement interventions over time.

Responding to concerns that higher taxation could slow economic activity, Langrial said the government wants individuals and businesses to pay taxes in line with their actual income and economic activity. He added that sectors generating substantial income but contributing relatively little to tax revenues should bear a larger share of the burden.

The FBR chairman said the government does not intend to disrupt business activity through new measures for traders. Instead, businesses above the prescribed revenue thresholds would be required to comply with existing tax laws, while digital systems would help identify underreporting and concealed transactions.

He added that compliant taxpayers would benefit from a facilitation mechanism similar to a “green channel”, under which businesses with a strong compliance history would face minimal interference, while cases showing significant discrepancies could be selected for audit.

Langrial said documentation, digitalisation and transparency would remain central to the government's broader tax reform agenda aimed at strengthening revenue collection without discouraging economic activity.