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LAHORE, Jan 24 (APP):Federal Board of Revenue (FBR) Chairman Rashid Langrial said on Saturday that it is not possible to stabilise country’s economy without expanding the tax net, some people pay taxes regularly while many still try to avoid taxes.
He expressed these views while speaking during a panel discussion in ‘Afkaar-e-Taza Thinkfest 2026’ held here at Alhamra here. Former federal finance minister Miftah Ismail and Chairman Interloop Mosaddiq Zulqarnain were also present.
The FBR Chairman said, the actual number of tax filers in Pakistan should be much higher than what is currently part of the tax system, citing that there are 42 million households in the country, out of which about seven percent have air conditioners installed, all such households should be included in the tax net.
In response to a question, he said that 4.9 million people filed tax returns during the fiscal year ending in June 2025, while this number has increased to 5.9 million this year. He revealed that out of these, 320,000 people indicated in their returns that they were not liable to pay tax, which is a serious problem in terms of tax compliance. Rashid Langrial said that tax ratio to GDP in Pakistan is lower than other countries in the region, the main reason being the limited tax net and low compliance rate. He clarified that when people are not included in the tax net, the burden will fall on only a few specific classes.
The Chairman mentioned that at present, the highest tax burden is on the salaried class, because they cannot hide their income. He said that the tax rate on salaries reaches 35 percent in some slabs, while the tax rate becomes 35 percent for an annual income of Rs. 4.1 million. He said that when compared to regional countries, the tax rate on the salaried class here is relatively high. He added that the average tax rate on a person earning Rs 10 million annually is about 27 percent, however, the real problem is not the tax rate but low compliance.
According to him, if more people come into the tax net, then a reduction in the tax rate can be possible. He revealed that out of 176,000 doctors in the country, only 55,000 submitted tax returns, while 39,000 of them declared an annual income of less than Rs 2 million, as a result of which they paid very little tax., which reflects the worrying situation regarding tax compliance.
Rashid Langrial highlighted the reasons for the increase in tax rates and said that under the NFC Award, the provinces have to pay a large share. Out of Rs 100, only Rs 38 goes to the federal government, while Rs 58 goes to the provinces. In addition, the four rupees of taxes that were abolished also do not benefit the provinces, which limits the financial resources of the federal government.
On this occasion, Mosaddiq Zulqarnain said that the salary class is continuously paying taxes, while the standard of tax payment in the corporate sector is not the same. He demanded that the salaried class should get a tax concession of up to 25 percent. On this, the Chairman FBR said that Mosaddiq Zulqarnain is a gold-plated taxpayer who pays taxes honestly.
The Chairman FBR clarified that there should be no separate tax rates for exporters, the FBR is moving towards the implementation of a normal tax regime. He said that if any company submits a wrong tax return, it will be audited.
Rashid Langrial said that the FBR is carrying out institutional reforms to increase tax collection. FBR has 17,000 employees and the accountability system is being made more effective. He said that monitoring of sugar mills and effective checks and balances have resulted in additional revenue of billions of rupees.
He further said that CSS officers have also been arrested on charges of corruption in FBR, which shows that the institution is serious about the accountability process. He expressed his resolve that the tax system will be made transparent, fair and effective so that the burden of tax falls equally on all the able-bodied people instead of a limited class.
The Chairman FBR expressed his resolve that the FBR will continue to reform the tax system to make it fairer, expand the tax net and improve compliance so that the burden of tax does not remain only on the salaried class but every able-bodied person should pay his responsibility.