Ambitious Overhaul to Strengthen Tax System

Prime Minister Shehbaz Sharif has taken a significant step to modernize Pakistan’s tax administration by approving the creation of a world-class digital ecosystem within the Federal Board of Revenue (FBR). This bold initiative aims to fundamentally strengthen the nation’s tax system, eliminate the informal economy, and improve revenue collection through the integration of advanced technology at every stage of the value chain.

High-Level Meeting Charts the Path Forward

The decision was finalized during a high-level review meeting in Islamabad, where Prime Minister Shehbaz Sharif chaired discussions on the ongoing reforms of the FBR. The meeting brought together key figures from the government and economic advisory sectors, including federal ministers Muhammad Aurangzeb, Ahad Cheema, and Bilal Azhar Kayani, as well as FBR Chairman and leading economic expert Mosharraf Zaidi.

During the session, officials presented an overview of the proposed digital ecosystem, emphasizing the shift from traditional digitization to a comprehensive, interconnected framework capable of monitoring every link in the tax and business chain in real time.

Global Expertise to Build Integrated Framework

Determined to ensure the highest standards, Prime Minister Shehbaz directed the engagement of globally renowned experts in digital systems and tax administration. He stressed that the scope of the reforms must go beyond simple digitization, focusing instead on constructing a robust digital ecosystem that links raw material procurement, imports, manufacturing, and final sales to consumers.

“Mere digitization is not enough,” PM Shehbaz stated. “We need a robust and complete digital ecosystem that connects every stage—from raw material procurement and imports to manufacturing and final sale to consumers.”

Centralized Data for Real-Time Monitoring

A key feature of the planned digital ecosystem is the centralization of all FBR data, enabling real-time monitoring of goods and financial flows across sectors. By linking all stakeholders to a unified system, the new infrastructure will offer unparalleled transparency and traceability, supporting efforts to curb tax evasion and formalize economic activity.

Prime Minister Shehbaz emphasized the importance of this capability, stating, “This digital infrastructure must be capable of providing real-time insights into the flow of goods and finances across sectors, making it easier to track transactions, combat tax evasion, and support evidence-based economic policy decisions.”

Strategic Use of Data for Economic Policy

The comprehensive system is expected to empower policymakers by delivering actionable insights drawn from accurate and up-to-date data. The Prime Minister underscored that such information should directly inform strategies designed to expand the tax base, reduce the informal economy, and lessen the tax burden on ordinary citizens.

“The data gathered through this system should inform strategic decisions to increase the tax base, formalize the economy, and ultimately reduce the tax burden on the common man,” he noted.

Early Results and Optimism for the Future

Participants at the meeting highlighted that the benefits of ongoing FBR reforms are already beginning to show positive effects on the broader economy. These reforms, combined with the proposed digital ecosystem, are expected to be transformative for revenue generation and governance.

Prime Minister Shehbaz expressed confidence that the transition to a fully functional digital system would prove to be a game-changer for Pakistan’s revenue collection and economic management. He reaffirmed his commitment to pushing forward with innovative reforms and leveraging modern technology for sustainable development.

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