Rs7,100 billion tax evaded annually, says FBR chairman

Federal Board of Revenue (FBR) Chairman Rashid Langrial made a startling revelation that Pakistan faces an annual tax evasion of Rs7,100 billion, including Rs3,400 billion in sales tax theft.

According to the 24NewsHD TV channel, he disclosed this during a briefing on the upcoming fiscal year's budget in a meeting of the National Assembly's Standing Committee on Finance, chaired by Syed Naveed Qamar, on Friday.

Further elaborating, Rashid Langrial revealed that income tax evasion alone accounts for Rs2,000 billion annually, underlining the grave state of tax compliance in the country.

The FBR Chairman also pointed out that there has been no substantial growth in tax revenue collections between 2016 and 2024. 

Langrial stated that the revenue collected in 2024 remains almost identical to what was collected in 2008.

He further highlighted that Pakistan's tax-to-GDP ratio remains among the lowest in the world. Last year, the ratio stood at 8.5%, while it is projected to improve to 10.5% this year.

He added that if the Petroleum Development Levy (PDL) is included in the calculation, Pakistan's tax-to-GDP ratio would increase to 12.4%.

The FBR chief also noted that provincial governments are expected to raise their tax collection from the current 0.8% to 3% of GDP.

Reporter: Waqas Azeem