Pakistan continues to face deep fiscal crisis which cannot be resolved easily. Taxes are insufficient to meet Pakistan’s debt servicing and defense needs. The tax-to-GDP ratio does not enable Pakistan to counter inflation or improve governance, deliver quality public services or improve human resource to reach a take-off stage for economic development. To address these issues, GoP initiated a Tax Administration Reforms Program (TARP) in FBR in the year 2005 to achieve objectives to include overall increase in the revenue collection for achieving fiscal targets; increase in tax to GDP ratio through broadening of the tax base; strengthening audit and enforcement procedures through professional capacity building of FBR officials; ensuring more equitable & transparent application of tax laws through provision of high quality tax services. By completing TARP in 2011 FBR has substantially achieved the desired objectives despite various obstacles in the existing operational environment. The successful completion of TARP rests upon Government’s firm resolve to reform FBR’s Tax Administration.

To achieve Reforms objectives, FBR established Large Taxpayer units (LTUs) and Regional Tax Offices (RTOs) to test the re-organized structure of income tax & Sales Tax and various Taxpayers Education and Facilitation Centres to improve voluntary compliance. Customs processes were also re-engineered by initiating Customs Administration Reform (CARE) which aimed at minimizing the clearance time of goods and reducing the cost of doing business. Re-engineered business processes were automated for e-filing of Income Tax returns and Goods Declarations, followed by establishment of an FBR website for information dissemination and a helpline for taxpayers.

Executive Committee of the National Economic Council (ECNEC) in its meeting held on 25.02.2005 approved the main phase of TARP with a capital cost of Rs. 9,501 million. Completion period of this main phase of TARP was five years starting from 01.01.2005. During the World Bank Mid-Term Review Mission in August-September 2007, the Bank reviewed the implementation progress of this project in detail and on the basis of slow utilization of funds mainly due to problems in development of Information Technology Systems during first two and half years, recommended restructuring of TARP budget for remaining life of the project on the basis of anticipated expenditures. Accordingly, a detailed exercise was undertaken on the basis of which a revised PC-I with reduced capital cost of Rs. 6,473 millions was prepared and submitted to the competent forum i.e. CDWP/ECNEC. Revised PC-I was approved by the CDWP on 30.04.2009 and ECNEC on 20.08.2009.