The National Board of Revenue (NBR) is implementing a comprehensive strategy to substantially increase revenue collection from domestic sources, focusing on digital transformation, tax net expansion, and administrative capacity enhancement.
According to an official document, the primary objective is to simplify and enhance transparency in tax payments, thereby improving taxpayer services to facilitate increased revenue collection by the NBR.
Major reform measures have been taken by the government, as outlined in the Medium Term Macroeconomic Policy Statement (2023-24 to 2025-26) of the Finance Ministry.
The implementation of the VAT & Supplementary Duty Act 2012 in July 2019 is expected to significantly boost VAT and supplementary duty collection in the medium term, following initial setbacks and COVID-19-related challenges.
The enactment of the new Customs Act, replacing the Customs Act 1969, incorporates international best practices to streamline customs processes and facilitate custom duties collection.
Similarly, the new Income Tax Act aims to create a conducive environment for taxpayers, simplify income tax assessment and collection procedures, and promote domestic and foreign investment.
To support the implementation of the new VAT law, the NBR initiated the ‘VAT Online Project (VoP)’ in operation since 2013, enhancing automation measures such as online VAT registration, central registration system, and online return submission.
Additionally, electronic payment (e-payment) systems for customs duties, income tax, and VAT have been introduced to facilitate convenient and timely payments.
The government’s launch of the Automated Invoice Portal (A-Challan) aims to ensure real-time deposit of government funds, prevent fraudulent activities, and eliminate discrepancies in revenue collection.
Furthermore, various initiatives, including eTDS Environment for income tax processing, Electronic Fiscal Devices (EFD) for VAT collection, and mandatory use of NBR-prescribed VAT software for VAT-registered industries, have been implemented to enhance tax compliance and transparency.
The NBR plans to operationalize a risk management system to optimize import clearance processes, streamline bonded warehousing, and conduct a Time Release Study to improve customs clearance efficiency.
Efforts to expand the taxpayer base include making return submission mandatory for all TIN-holders and implementing measures such as Online National Single Window, Post Clearance Audit, and Advance Ruling to boost international trade dynamics.
Administrative expansion of the income tax department is also underway, along with the introduction of the Document Verification System (DVS) to enhance financial discipline and tax collection transparency.
