Chairman Federal Board of Revenue (FBR) Rashid Mahmood Langrial has warned that traders whose lifestyles appear inconsistent with their declared income may face tax audits, as the government intensifies efforts to expand the tax base and improve compliance.
Speaking to a private news channel, Langrial rejected the perception that traders could fulfil all tax obligations by paying a fixed amount of Rs. 25,000. He said tax liability would continue to be determined by actual business activity, income levels, and applicable tax rules.
The FBR chairman said taxpayers whose spending patterns and standard of living significantly exceed their declared income could be selected for audit. According to him, a visible mismatch between reported earnings and lifestyle indicators would raise questions about the accuracy of tax declarations.
He explained that if a trader records higher sales volumes, taxes would be assessed according to the prescribed rates, regardless of any minimum tax arrangements. The government is increasingly relying on data driven assessments to identify discrepancies between income declarations and actual economic activity.
Langrial said nearly 70 million individuals are not paying the correct amount of tax, highlighting the scale of Pakistan’s tax compliance challenge. Successive governments have struggled to broaden the tax net, leaving a relatively small segment of taxpayers to shoulder a large share of revenue collection.
Commenting on corporate taxation, the FBR chief acknowledged that the super tax imposed on the corporate sector was not an ideal long term policy measure. He said the levy was introduced due to specific economic and fiscal constraints faced by the government at the time.
