On July 26, 2025, Pakistan took a major step toward tax modernization as Prime Minister Shehbaz Sharif approved a full digital ecosystem overhaul of the Federal Board of Revenue (FBR). The move aims to improve tax collection, enhance economic transparency, and integrate real-time monitoring across the supply chain—from raw material imports to final consumer sales.
Details of New Digital Ecosystem from FBR
The new FBR digital ecosystem will include mandatory business-to-business e-invoicing, wider adoption of Point of Sale (POS) systems, and AI-powered, risk-based tax audits to detect evasion more efficiently. A centralized Command and Control Center will oversee operations nationwide, and new Urdu-language tax return forms plus a taxpayer helpline will make compliance easier for ordinary citizens.
The government has tasked the FBR with collecting Rs14.13 trillion ($47.4 billion) in tax revenue for the 2025–26 fiscal year—a 9% increase from last year. These reforms are expected to help meet that goal while boosting the tax-to-GDP ratio, a long-standing weakness in Pakistan’s economy.
Results are already showing:
- 7.2 million tax filers were recorded by June 30, 2025—a 60% rise from the previous year.
- Rs455 billion in retail taxes were collected via POS systems.
Public reaction has been mixed. While many on X (formerly Twitter) praised the progress, some business owners expressed unease about AI-generated tax notices, raising concerns about accuracy and appeal mechanisms.
To ensure global credibility, Pakistan plans to consult international experts and align reforms with its $7 billion IMF program, which emphasizes economic stability and fiscal responsibility.
What’s Next
Ultimately, the FBR’s digital transformation is designed to remove bureaucratic red tape, reduce corruption, and enable data-driven policymaking—positioning Pakistan for long-term, sustainable economic growth.
Published in SouthAsianDesk, July 26th, 2025
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