Prime Minister Shehbaz Sharif has directed swift action on pending tax cases in Pakistan’s Supreme Court and emphasized improving enforcement to address the Rs386 billion revenue shortfall. The government continues to grapple with financial challenges as it seeks ways to recover funds and meet tax targets.
Sources revealed to The Express Tribune that the Prime Minister held multiple meetings this week, the latest on Friday, with officials from the Federal Board of Revenue (FBR). These meetings focused on updates regarding the hiring of appellate tribunal members and strategies to resolve ongoing court cases related to the tax shortfall. The government is also concerned that the tax deficit could widen, with the FBR possibly missing the Rs957 billion target for January.
During one meeting, the Prime Minister instructed officials to increase enforcement efforts to recover at least Rs400 billion of the projected Rs7.2 trillion tax gap for the July-December period. He reaffirmed that no additional burden would be placed on taxpayers and emphasized the need for the FBR to double its efforts, especially after approving new vehicle purchases and increasing financial packages for employees.
Despite efforts to close the gap, the FBR faces significant challenges. Last month, FBR Chairman Rashid Langrial projected that the tax gap could increase by Rs900 billion by the end of the fiscal year. Sales tax, income tax, and customs duties account for the bulk of this deficit, totaling an estimated Rs7.1 trillion.
In an attempt to address this, the FBR targeted 186,000 top tax evaders and businesses. However, the results have been underwhelming, with only Rs378 million collected from 38,000 potential taxpayers who responded to notices.
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While the FBR’s tax-to-GDP ratio slightly exceeded the IMF’s target of 10.6% for the second quarter of the fiscal year, the overall tax collection remains below expectations, with a subpar 0.9% growth rate in the first quarter.
In addition to addressing tax enforcement, the Prime Minister has also called on the Attorney General for Pakistan to expedite the resolution of pending tax-related cases in the courts. These cases, including challenges to taxes on immovable properties and super taxes, are seen as potential sources of revenue recovery, with an estimated Rs100 billion recoverable if resolved this fiscal year.
Meanwhile, the Prime Minister emphasized the importance of recruiting top legal talent for appellate tribunals to ensure swift and effective resolution of these cases. He proposed headhunting for skilled professionals who could be offered competitive salaries to attract international expertise.
In another development, Prime Minister Sharif praised the Muslim World League (MWL) for its role in promoting the true identity of Islam globally and fostering interfaith understanding. He also expressed appreciation for MWL’s decision to establish the Sirat Museum in Pakistan, a joint project he hopes will be completed soon.
