Another Tax Agency? Pakistan Keeps Renaming the Problem Instead of Fixing It

Every few years, the government of Pakistan decides that the reason we do not collect enough taxes is the name on the building. First it was the Central Board of Revenue, then it became the Federal Board of Revenue. Now, according to reports this week, the government is considering creating a brand-new national tax agency altogether — or restructuring the FBR yet again. Let me tell you what I think when I read this: we are rearranging furniture in a burning house. Here are the facts. Prime Minister Shehbaz Sharif has told the FBR to submit full proposals — on human resources, restructuring, and institutional changes — by October 19. The idea of a separate tax agency came up at a high-level meeting last Saturday, and FBR Chairman Rashid Langrial has asked his officers to prepare options for the prime minister. So this is serious enough to be on the table. But — and this is important — nothing has been decided. The FBR itself says the focus is on improving the existing setup through better staffing, technology, and processes. It also rejected one rumour outright: tax collection will not be handed to a private company. One option being discussed is that the FBR keeps running alongside a new agency, with employees who do not move over staying in their posts until retirement. Now let me be honest about why this story frustrates me. This is not the first time. Since 2000, we have restructured the tax machinery again and again — new boards, new service cadres, and in 2024 a transformation programme worth more than Rs55 billion. A caretaker government even proposed splitting Customs from Inland Revenue. Every reform promises a breakthrough. Every few years, we are back at the same table, drawing the same boxes. And the numbers explain why the frustration keeps returning. Last fiscal year, our tax-to-GDP ratio was just 10.3% — one of the lowest in the region. Revenue collection fell more than Rs1.1 trillion short of the target. This year the government has set a target of Rs15.263 trillion, which needs revenue to grow by more than 17%. That is a mountain, and renaming the climber does not make it smaller. I am not against reform. Forgive me, but I am against reform as theatre. The problem with tax collection in Pakistan was never the org chart. It is that too few people pay, too many are outside the net, and the honest taxpayer is treated like a suspect while the powerful stay untouched. A new agency with the same political pressures will produce the same results with a different letterhead. There is one thing worth watching, though. If a new agency comes with real legislative backing — and reports say it would need changes to the FBR Act of 2007 and several tax laws — it could mean the government is finally willing to fight the legal battles that past reforms avoided. Laws matter more than logos. I keep coming back to a simple question: will this new agency collect taxes from the people who have never paid them, or will it just squeeze the same salaried workers and shopkeepers harder? Because I know which one is easier, and I know which one keeps happening. Pakistan does not have a tax agency problem. It has a tax courage problem. Until that changes, we will keep building new agencies to collect the same excuses.