The federal government is evaluating the necessity of establishing a new tax collection agency for Pakistan. Officials anticipate a revenue shortfall of more than Rs650 billion against the current year's target of Rs15.263 trillion.
The Federal Board of Revenue (FBR) must submit proposals for restructuring and human-resource reform to the Prime Minister by 19 October 2026. Discussions are underway regarding the creation of an entirely new organisation to manage these functions.
The FBR's tax-to-GDP ratio currently sits at approximately 10.3%. A $200 million foreign-funded programme for tax system modernisation received approval last month.
External financing for modernising the tax system has reached nearly $5 billion over recent years. The concept of a Pakistan Revenue Authority or a federal National Tax Agency to replace fragmented provincial and federal collection bodies has appeared in various books and articles.
Dr Pervez Tahir proposed a single professional tax-collection agency for federal, provincial, and local taxes that remains institutionally autonomous and separated from policy formulation. Dr Pervez Tahir stated that the existing organisation embodied "Revenuecracy": a system geared towards extracting readily collectible revenue rather than building an equitable tax system.
