Maaz Mahmood urges government to broaden tax base, end policy complacency
ISLAMABAD, OCT 26 /DNA/ – The All Pakistan Business Forum (APBF) has raised serious concerns over the country’s widening fiscal gap after the Federal Board of Revenue (FBR) fell short of its first-quarter target by Rs198 billion, calling it a wake-up call for structural tax reforms and decisive policy action. The forum warned that Pakistan’s revenue system remains overly dependent on indirect taxes and ad-hoc measures, while the real problem—weak enforcement and a narrow tax base—continues to be ignored.
According to official data, the FBR collected Rs2.885 trillion during the July–September quarter of the 2025–26 fiscal year, against a target of Rs3.083 trillion. The collection also lagged behind the International Monetary Fund’s (IMF) conservative benchmark of Rs3.023 trillion by Rs138 billion, reflecting the persistent weakness of the country’s revenue machinery despite repeated reform attempts.
APBF President Syed Maaz Mahmood said the figures prove that tinkering with tax rates and relying on one-off measures can no longer bridge the fiscal deficit. “Pakistan’s problem is not the lack of taxes; it is the lack of a fair, enforceable, and efficient system,” he said. “Every year, we set higher targets, but the structure remains broken. Without expanding the tax base and ensuring equitable compliance, shortfalls like this will keep recurring.”
The detailed breakdown of the FBR’s collection shows that income tax receipts stood at Rs1.363 trillion, missing the target by Rs96 billion. Sales tax totaled Rs1.02 trillion—Rs122 billion below target—while federal excise duty brought in Rs190 billion, marginally exceeding its goal by Rs2 billion. Customs duty was the only segment that performed better than expected, collecting Rs312 billion, Rs17 billion above the target. Despite these gains, the overall growth of around 11–13 percent was well below what is required to meet the annual goal of Rs14.13 trillion, which demands a 20 percent increase over last year’s collection.
APBF Chairman Ibrahim Qureshi expressed concern that even after heavy funding for FBR’s modernization and automation plan, the results remain disappointing. “We were promised a digital transformation, yet the same inefficiencies, litigation delays, and administrative loopholes continue,” he said. He emphasized that the FBR’s credibility and capacity must be rebuilt on transparency, accountability, and simplicity in tax procedures.
Ibrahim Qureshi also highlighted that income tax return filing remained sluggish. As of September 30, only slightly over 4 million returns had been filed, compared to 7.7 million in the previous tax year. The FBR had to extend the filing deadline by 15 days to encourage more submissions. “The culture of compliance cannot grow when honest taxpayers feel burdened while untaxed sectors remain untouched,” Mahmood added.
Maaz Mahmood reiterated the forum’s longstanding demand to eliminate amnesty schemes, which discourage honest taxpayers, and to bring all income sources—including agriculture, real estate, and retail—into the tax net. “Pakistan’s fiscal stability cannot rest on a handful of compliant taxpayers while others continue to evade,” he said. Mahmood further urged the government to lower reliance on indirect taxes that fuel inflation and to design a progressive, growth-oriented system that encourages entrepreneurship rather than punishes it.
The APBF President concluded that Pakistan’s economic revival depends on collective political will and institutional reform. “We are not short of policies; we are short of implementation,” he warned. “Unless the government takes bold, time-bound actions to reform the tax system, Pakistan will continue missing IMF targets and remain trapped in cycles of borrowing, austerity, and stagnation.”
