ISLAMABAD: The President of Pakistan Asif Ali Zardari has promulgated the Tax Amendments Ordinance 2025, effective immediately, introducing significant changes to tax enforcement mechanisms.
Under the ordinance, taxes will become immediately payable following a decision by the High Court or Supreme Court.
The Federal Board of Revenue (FBR) has been granted the authority to freeze bank accounts without prior notice or proceedings.
The ordinance also empowers the FBR to appoint officers at business premises to monitor production and stock, ensuring stricter oversight.
Additionally, the FBR can now collaborate with other federal and provincial agencies to seize assets. With these provisions, the ordinance effectively transforms the FBR into a “fully empowered regulator,” equipped with unprecedented authority to enforce tax compliance across the country.
Also read: How Digital Transformation Can Enhance Pakistan’s Tax Revenue
It is worth mentioning here that the Federal Board of Revenue (FBR) set a target to increase the tax-to-GDP ratio to 11.2% for the upcoming fiscal year.
The FBR’s target will be determined based on the estimated GDP size for the next fiscal year. For the current fiscal year, a tax-to-GDP ratio of 10.6% is expected to be achieved, with the ratio already reaching approximately 10.8%, sources added.
Sources revealed that an agreement has been reached to raise the tax-to-GDP ratio by more than 0.5% for the next fiscal year. For the fiscal year 2025-26, the FBR’s target will also be set based on the projected GDP size.
Under the loan program, the tax-to-GDP ratio is planned to reach 13% over the next two years, with a gradual annual increase, FBR sources stated.
Virtual meetings with the IMF are focusing on budget targets, and the second installment of the loan program will be approved by the IMF Executive Board once budget proposals are finalized. However, concerns remain about a potential shortfall in the revised tax collection target of Rs12,300 billion for the current fiscal year, sources added.
