FBR Chairman Reveals Pakistan’s Top 5% Tax Evaders Cheat Government of Rs. 1.6 Trillion

Islamabad:Chairman of the Federal Board of Revenue (FBR), Rashid Mehmood Langrial, has revealed that the top 5% of Pakistan’s highest earners evade taxes amounting to a staggering Rs. 1.6 trillion. He stated that the government is focused on taking action against these high-income tax evaders.

During a press conference, Chairman Langrial disclosed that the tax gap for the current fiscal year would amount to **7.1 trillion rupees**, up from **6.2 trillion rupees** last year. He emphasized that the government’s tax collection efforts are mainly focused on the top 5% of income earners, who are responsible for the majority of tax evasion.

Langrial further explained that approximately **3.3 million individuals** belong to this high-income group, of whom only **600,000** file tax returns. The remaining **2.7 million** do not file income tax returns at all. These individuals, according to Langrial, either file under lower income categories or fail to file any returns altogether, despite owing over **Rs. 1.6 trillion** in taxes.

If the government were to reduce the threshold for the top 5% category, Langrial noted that the total taxes owed would be no more than **Rs. 140 billion**, underscoring the extent of tax evasion among wealthy individuals.

In line with the government’s commitment to the **IMF** conditions, Finance Minister Muhammad Aurangzeb announced the government’s strategy to implement **digitalization** within the FBR to bring high earners into the tax net. The FBR has already sent tax notices to **186,000 high-wealth individuals** who own significant assets, income, and vehicles but fail to pay taxes at the required level.

The **top 5%** of Pakistan’s wealthiest individuals, estimated to be around **670,000** people, are believed to be engaging in tax evasion. These individuals, despite their significant expenditures, have avoided being included in the tax net. The FBR has placed **600,000** of these wealthy individuals on its radar.

When asked whether the government plans to introduce a **mini-budget** or convince the IMF to reduce its tax collection target, Finance Minister Aurangzeb refrained from giving a direct answer. He emphasized that the government would demonstrate its sincerity to the IMF by showing the concrete actions taken and shared details in “good faith.” He also noted that there have been changes in some assumptions, particularly in light of a **sharp decline in inflation**.

Aurangzeb also clarified that the **National Finance Commission Agreement** has been finalized between the center and provinces and will be implemented with their cooperation. He pointed out that the **Punjab Assembly** has already passed the **Agricultural Income Tax (AIT)** law, and other provinces are making progress in this regard.

Regarding FBR’s performance, Aurangzeb noted that there had been a **29% increase** in tax revenue. However, the target for the current fiscal year has been set at a high level of **40%**.

Chairman Langrial also clarified that **190,000 non-filers** have been prioritized based on six criteria, such as individuals earning **Rs. 1.3 million annually** from bank profits or owning **three or more vehicles** worth a total of **Rs. 10 million**.

In addition to this, the **Senate Standing Committee on Finance** has approved the **Tax Laws Amendment Bill**, which includes provisions to prevent **non-compliant tax filers** from purchasing expensive vehicles, property, or bungalows. The bill also imposes restrictions on opening bank accounts and purchasing shares for non-filers.