ISLAMABAD: Prime Minister Shehbaz Sharif has directed authorities to take effective and immediate action against individuals and businesses involved in tax evasion, smuggling and illegal commercial activities.
The prime minister issued the directives while chairing a weekly review meeting on reforms at the Federal Board of Revenue (FBR). During the meeting, the prime minister was briefed on the restructuring of Pakistan Revenue Automation Limited (PRAL) and progress on various measures being undertaken as part of the government’s tax reform agenda.
Prime Minister Shehbaz Sharif instructed the relevant authorities to accelerate action against tax evasion, smuggling and businesses operating outside the legal framework. He emphasised that efforts to improve revenue collection must be accompanied by effective enforcement against activities that deprive the national exchequer of legitimate revenue.
The prime minister also directed officials to ensure that all reform measures introduced under the tax system are implemented within the prescribed timelines.
He further ordered that a third-party audit of the reform process be ensured in order to improve transparency and independently assess the implementation and effectiveness of the measures being introduced.
Speaking during the meeting, Prime Minister Shehbaz said the government was implementing reforms in the tax system with the objective of supporting the country’s economic development.
He highlighted digitalisation, production monitoring and automation as key pillars of the FBR reform programme.
According to the prime minister, greater use of digital systems and automated processes can help improve the efficiency of tax administration, strengthen monitoring mechanisms and reduce opportunities for tax evasion.
The government has been pursuing tax reforms aimed at broad evasion remains a major challenge for Pakistan’s economy, as businesses and individuals operating outside the formal tax system can reduce the government’s ability to generate revenueening the tax base, improving compliance and increasing revenue collection. The reforms also seek to modernise tax administration through technology and reduce reliance on manual processes.
During the meeting, the prime minister welcomed the ongoing process of appointing goods evaluators with good professional reputations within the FBR system.
He described the appointment of reputable goods evaluators as a positive development and appreciated the efforts of FBR Chairman and his team in this regard.
Goods valuation is an important part of customs and revenue administration because the declared value of imported goods can directly affect the amount of duties and taxes collected by the government. Effective valuation mechanisms can therefore help prevent under-invoicing and protect public revenue.
The prime minister’s directives come as the government seeks to strengthen its revenue collection system and address leakages caused by tax evasion, smuggling and undocumented economic activity.
Tax evasion remains a major challenge for Pakistan’s economy, as businesses and individuals operating outside the formal tax system can reduce the government’s ability to generate revenue needed for public services and development projects.
Similarly, smuggling can undermine legitimate businesses by allowing untaxed or illegally imported goods to enter the market, creating unfair competition for companies that comply with tax and customs regulations.
The government’s emphasis on digitalisation is intended to improve the ability of tax authorities to monitor economic activity and identify irregularities. Automated systems can also facilitate data analysis and improve coordination between different departments involved in revenue collection.
Production monitoring is another important component of the reforms. Better monitoring of industrial production can help authorities compare reported output and sales with actual production levels, potentially identifying discrepancies that could indicate tax evasion.
The prime minister stressed that these reforms should not remain limited to policy announcements and must be implemented according to clearly defined timelines.
He also emphasised the importance of independent oversight through third-party audits. Such audits can help assess whether reform measures are being implemented as planned and whether they are producing the desired results.
The government believes that strengthening the tax system is essential for reducing dependence on borrowing and improving the country’s financial position.
A broader and more efficient tax base could provide the state with greater resources for infrastructure, education, healthcare and other public services.
At the same time, effective enforcement against tax evasion and illegal businesses is expected to create a more level playing field for compliant taxpayers. Businesses that regularly pay taxes and follow regulations often face higher costs than those operating outside the formal system.
The prime minister’s instructions therefore combine enforcement measures with structural reforms aimed at modernising the tax administration system.
The restructuring of PRAL was also discussed during the meeting. The organisation plays a role in supporting the FBR’s digital and technology-related systems, making its restructuring relevant to the government’s broader push towards automation and digital tax administration.
Prime Minister Shehbaz Sharif also praised the FBR leadership for its efforts to improve the goods valuation system and strengthen the institution’s overall performance.
He directed the authorities to maintain momentum on the reform programme and ensure that measures designed to improve revenue collection are implemented effectively.
The meeting reflects the government’s continued focus on increasing tax revenues while tackling activities that contribute to revenue losses.
The prime minister’s latest instructions make it clear that the government intends to pursue both administrative reform and stronger enforcement against those involved in tax evasion, smuggling and illegal commercial activities.
The success of the programme, however, will depend on effective implementation, transparency and consistent enforcement. Digital systems, automated processes, independent audits and improved monitoring mechanisms are expected to form the foundation of the government’s effort to modernise Pakistan’s tax administration.
For now, Prime Minister Shehbaz Sharif has directed the FBR and relevant authorities to accelerate the reform process, complete measures within the prescribed timelines and take effective action against tax evaders, smugglers and illegal businesses.
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