Pakistan’s Tax-to-GDP Ratio Clocks in at 9.2%

The country’s tax-to-GDP ratio now stands at 9.2 percent according to the Federal Board of Revenue (FBR) report on 2021-22 performance.

The report says that the tax-to-GDP ratio in Pakistan has been low compared to other regional countries but it has increased significantly in recent years. The ratio was 4.4 percent in 1950 which has now increased to 9.2 percent.

The continuing reform efforts are expected to further increase the tax-to-GDP ratio in coming years, the report added.

FBR Chairman Asim Ahmad said that the fiscal year 2021-22 (FY22) witnessed a global wave of inflation, supply chain disruptions, high-interest rates, and devaluation of the developing world’s currencies. Despite these challenges, Pakistan’s economy performed well as a result of appropriate policy and operational interventions.

The economy not only continued on its path of recovery after the Covid-19-related downturn but it also gained growth momentum. The real GDP posted a healthy growth of nearly 6 percent during the year. The revenue collection performance has been remarkably well during FY22.

Initially, a revenue collection target of Rs. 5,829 billion was assigned to FBR which was later revised upward to Rs. 6,100 billion. FBR exceeded this revised target by collecting a total of Rs. 6,148.5 billion.

In absolute terms the collection during FY22 was Rs. 1,403.5 billion higher than the previous fiscal year, recording an impressive growth of 29 percent, FBR Chairman added.



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