FBR urges builders to support drive to raise tax-to-GDP ratio to 17%

KARACHI: Federal Board of Revenue (FBR) Chief Commissioner Aftab Alam has called on all stakeholders to fulfil their national responsibility by helping raise Pakistan’s tax-to-GDP ratio to 17 per cent and bringing it closer to India’s level.

Speaking to members of the Association of Builders and Developers (ABAD) at a luncheon event on Tuesday, Alam stressed the need to widen the tax net, noting that Pakistan’s tax-to-GDP ratio currently stands at just 9.0 per cent. “Taxpayers are carrying an extra burden due to the limited number of filers,” he said. “Raising the tax-to-GDP ratio will enable the government to repay debt and stabilise the economy.”

He underscored that the military had fulfilled its duty and it was now time for citizens and businesses to do the same. “The Pakistan Armed Forces have made great sacrifices. Now, it is our turn to support the country by increasing tax contributions,” he remarked.

The chief commissioner informed attendees that two dedicated commissioners have been appointed in Karachi to assist the construction sector and assured that, under the law, taxpayer data is not shared with third parties.

ABAD Chairperson Muhammad Hassan Bakshi also addressed the gathering, warning that Pakistan was fighting an economic war that required urgent investment. He described the construction sector as a key engine of growth, calling on the FBR and the federal government to introduce a consistent, long-term tax policy to build investor confidence.

Bakshi raised concerns about frequent changes in tax regulations and the issuance of tax notices to builders and developers. In response, Aftab Alam clarified that such notices -- particularly under Section 161 -- could be avoided if withholding tax statements are submitted correctly and on time.

“If you receive a notice, simply present your withholding statement and the matter will be resolved,” he advised.Bakshi emphasised that nearly 50 per cent of the $34 billion sent home by overseas Pakistanis annually is invested in construction. “The construction industry is the country’s largest employment generator, linked to 72 allied industries,” he said.

The ABAD chairman urged the FBR to send copies of tax notices to the ABAD House as well, so the association could offer legal support to members. He also proposed the appointment of an FBR focal person at ABAD House for better coordination, and called for reforms to the property valuation system.

Bakshi praised the Medium Taxpayer Office’s public commitment to integrity, calling it a welcome initiative led by Aftab Alam. He revealed that 50 construction projects worth $5 billion are ready for investment in Karachi’s South District.

He also announced the upcoming launch of a subsidised housing finance scheme aimed at increasing home ownership. Under the plan, buyers would pay 20 per cent upfront and the remaining 80 per cent in instalments. He estimated that this initiative could generate trillions of rupees in tax revenue for the FBR.