ISLAMABAD: Pakistan’s Federal Board of Revenue (FBR) will launch simplified digital tax returns for salaried individuals today, Tuesday, the prime minister’s office announced, in a move aimed at increasing tax compliance and widening the country’s historically narrow tax base.

The launch is part of a broader reform effort tied to the government’s economic stabilization agenda and structural benchmarks under a $7 billion International Monetary Fund (IMF) program. Despite a population of more than 240 million, Pakistan has one of the lowest tax-to-GDP ratios in the region, with only a small percentage of citizens filing returns.

At a meeting to review progress on tax reforms, Prime Minister Shehbaz Sharif was briefed that besides the new tax system for the salaried class, user-friendly, digital tax return forms would also be made available to other taxpayer categories from July 30. Urdu-language versions will be introduced to increase accessibility for salaried individuals.

“A third-party validation should be ensured for the transparency of all FBR reforms,” the prime minister was quoted as saying by his office. “Public awareness campaign should be launched regarding the ease of filing tax returns so that more and more people file returns under the new system.”

In June, the government set a record-high tax collection target of Rs14.13 trillion ($47.4 billion) for the fiscal year 2025–26, marking a 9 percent increase from the previous year. Officials say meeting this goal is essential to reducing reliance on external debt and ensuring long-term fiscal sustainability.

Sharif emphasized that expanding the tax net and easing the burden on low-income groups were key policy priorities. He also praised the FBR for deploying artificial intelligence in tax assessments, calling it a “milestone” in modernizing the country’s tax infrastructure.

“The prime minister directed provision of special facilities to small and medium-sized businesses to join the digital invoicing system,” the statement from his office said.

IMF country representative Mahir Binici said last week Pakistan’s recent reforms had helped restore macroeconomic stability and rebuild investor confidence but warned that global uncertainty continued to pose significant risks.

“Structural reforms remain central to Pakistan’s long-term economic sustainability, particularly reforms that strengthen tax equity, improve the business climate, and encourage private-sector-led investment,” Binici said during a recent lecture at an Islamabad-based think tank.

He added that geopolitical tensions, weakening global cooperation and external shocks required governments like Pakistan’s to take prudent, forward-looking actions to shield their economies.