An independent economic analyst argues that Pakistan's economic ambitions, including affordable housing and IT development, cannot be sustained without a broader tax base that captures previously undeclared incomes. While the FBR collected approximately Rs13 trillion in net taxes during FY2025-26, the analyst notes this achievement was against a revised target and cannot alone demonstrate successful tax widening.
The analyst contends that current concessions for documented taxpayers are insufficient if they are not accompanied by measurable progress in taxing previously undeclared incomes. The analyst states that when undeclared wealth periodically enters the system on favourable terms, honest taxpayers receive the wrong message. The analyst suggests that the state must ensure that deliberate evasion attracts consequences while protecting compliant businesses from harassment.
Specific challenges were noted regarding the Asaan Tax Scheme. On November 3, the government acknowledged before a parliamentary committee that participation had disappointed and announced plans for enforcement. The report indicates that FBR possesses information on approximately 3.7 million retailers, including identity and utility records for 1.4 million, but the challenge remains converting this into verified liabilities.
The analyst points to the IMF's 2026 review, which identified agriculture as the largest undertaxed sector and noted delays in implementing agricultural income tax reforms. While small farmers facing volatile weather deserve protection, the analyst states that large agricultural incomes should nevertheless face taxation comparable to other incomes. Furthermore, the IMF representative Mahir Binici stated at an SDPI conference on November 6 that these reforms can only be durable and deliver dividends if the burden is shared, vulnerable households are protected and the benefits are visible. Binici also emphasised revenue mobilisation of at least 15% of GDP to support public services.
To achieve these goals, the analyst proposes several enforcement and structural measures:
Identifying discrepancies in property purchases, vehicle registrations, commercial electricity consumption, imports, and business receipts.
Applying consistent scrutiny to retailers, wholesalers, professionals, private schools, hospitals, restaurants, jewellers, and estate agents.
Expanding electronic invoicing and simplifying federal and provincial registration.
Requiring verifiable compliance for subsidised business credit and government procurement.
Publishing quarterly dashboards showing additional collections, active taxpayers and resolved appeals.
The analyst also advocated for the phased withdrawal of the Rs5,000 banknote and the documentation of gold transactions to create a durable audit trail. While citing international examples of anti-corruption crackdowns in Saudi Arabia, China, Malaysia, South Korea, and Vietnam, the analyst clarifies these are accountability examples and not interchangeable models for tax administration. The analyst concludes that while "carrots" have their place, voluntary compliance cannot remain voluntary taxation.
