KARACHI: Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial announced a comprehensive reform initiative targeting tax non-compliance across multiple sectors, including tobacco, retail, and passive income regimes.
Following the success of recent enforcement efforts in the sugar industry—which resulted in a 39% increase in tax collection without altering tax rates—the FBR is now expanding similar measures to other sectors. Langrial stated that the tobacco industry, historically plagued by tax evasion, will undergo a transformation similar to the sugar sector.
He acknowledged that increasing tax rates in the formal economy often benefits informal players. Instead, the government aims to directly confront non-compliant businesses. He cited that non-compliant sugar mills have shut down under the new monitoring system, leading to near-total compliance in many areas.
To prevent corruption within FBR itself, the Intelligence Bureau has been tasked with monitoring tax officials. This collaboration has already led to internal disciplinary actions against corrupt elements.
Langrial also revealed that the poultry industry is under scrutiny, with early monitoring uncovering significant underreporting and tax evasion worth millions.
Regarding passive income, a 15% tax rate has been introduced to correct imbalances between passive and active income taxation, with active income currently taxed at 29%. He stressed that this move is designed to encourage investment and reduce discrimination against business income.
He also clarified that comparing sectors such as salaried and construction is misleading due to the diverse types of income within each.
