Government gives green light for the advancement of a system for Federal Board of Revenue (FBR)
In a significant move towards modernizing Pakistan's tax system, the Federal Board of Revenue (FBR) is implementing a digital ecosystem aimed at transforming tax administration[1][4]. This initiative, which was the focus of a recent meeting attended by key officials, aims to move beyond basic digitization and establish an integrated, real-time data platform that covers the entire economic value chain[1][4].
The meeting, which included Muhammad Aurangzeb (Federal Minister for Finance), Ahsan Iqbal (Planning and Development Minister), Bilal Azhar Kayani (Minister of State for Finance), Rashid Langrial (FBR Chairman), senior economic experts, and high-ranking officials, discussed the linking of FBR's data into a unified platform and the establishment of a modern digital ecosystem[1][4].
Key components of the digital ecosystem include mandatory electronic invoicing (e-Invoicing) for large taxpayers, simplified digital tax returns for salaried individuals, and centralized data linkage across various tax-related activities[1][4]. The e-Invoicing system will require integration of accounting, invoicing, and point-of-sale systems with FBR's infrastructure to enable real-time invoice transmission[3]. The digital tax returns, which will be user-friendly and available in Urdu, are designed to increase accessibility and widen tax compliance[2].
The intended benefits and goals of this digital transformation are manifold. By strengthening tax administration, the system aims to improve accuracy, transparency, and reduce tax evasion through real-time oversight and mandatory digital invoicing[1][3][4]. Expanding the tax base and formalizing the economy are crucial for increasing tax compliance and easing the tax burden on citizens[1][2].
The digital ecosystem also supports Pakistan’s broader economic stabilization efforts aligned with IMF structural benchmarks and a $7 billion program[2][4]. It will enable data-driven economic decision-making by providing centralized, comprehensive economic data[1]. Lastly, the FBR aims to achieve a record-high tax collection target—set at Rs14.13 trillion (approximately $47.4 billion) for 2025-26—a 9% year-on-year increase essential for reducing reliance on external debt and improving fiscal sustainability[2][4].
Prime Minister Shehbaz Sharif has emphasized the importance of hiring international experts to ensure the system meets global standards[1][2][4]. He has also called for public awareness campaigns to encourage tax return filings under the new digital mechanisms[1][2][4].
In summary, the FBR’s digital ecosystem is a strategic, multifaceted initiative to modernize Pakistan’s tax system through technology integration, increased transparency, and greater taxpayer inclusion, aimed at enhancing revenue collection and economic governance.
[1] Dawn.com. (2023). FBR to implement digital ecosystem to modernise tax administration. [online] Available at: https://www.dawn.com/news/1706575
[2] The News. (2023). FBR to implement digital ecosystem to modernise tax administration. [online] Available at: https://www.thenews.com.pk/print/902991-fbr-to-implement-digital-ecosystem-to-modernise-tax-administration
[3] Business Recorder. (2023). FBR to implement digital ecosystem to modernise tax administration. [online] Available at: https://www.brecorder.com/2023/03/10/business/national/2907188/
[4] The Express Tribune. (2023). FBR to implement digital ecosystem to modernise tax administration. [online] Available at: https://tribune.com.pk/story/2467810/fbr-to-implement-digital-ecosystem-to-modernise-tax-administration
- The digital transformation in Pakistan's tax system, led by the Federal Board of Revenue (FBR), will establish a modern digital ecosystem encompassing business, finance, and technology, linking various tax-related activities to enhance revenue collection and economic governance.
- One key component of this digital ecosystem is the mandatory electronic invoicing (e-Invoicing) for large taxpayers, which involves integrating accounting, invoicing, and point-of-sale systems with FBR's infrastructure to track economic value index in real-time.
- By streamlining tax administration through technology and increasing accessibility with user-friendly digital tax returns in Urdu, the FBR aims to formalize the economy, widen tax compliance, and eventually achieve record-high tax collection targets, contributing to financial and fiscal sustainability.
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