Page 43 - CMA Journal (July-August 2025)

o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
i
i
o
i
i
i
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
n
n
n
n
n
n
n
n
n
n
n
n
n
n
o
o
o
o
o
o
o
n
n
n
n
n
n
i
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
c
c
c
t
t
t
t
t
c
e
e
e
Focus Section
e
c
c
e
e
e
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
i
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
t
i
i
i
t
i
i
i
i
i
i
t
t
t
t
t
t
t
t
t
t
t
Leveraging Data Analytics for
Tax Reform and Revenue Mobilization
A well-organized tax system is the main pillar of a analytics allows tax
successful economy. So far, developing countries like authorities to be more
Pakistan are struggling with issues of tax evasion, limited vigilant, targeted, and
tax bases, and managerial inefficiencies. To combat these transparent in tax
problems, leveraging data has emerged as a implementation and
problem-solving tool to accelerate revenue growth and policy matters.
implement genuine tax reforms. The incorporation of big
data analytics into the tax management system enables Pakistan’s
simultaneous predictive analysis and rigorous Current Taxation
monitoring that compels responsive implementation Landscape
(OECD, 2021).
The main characteris-
Economies that have adopted data-driven tax guidelines
such as India, Brazil, and Estonia have demonstrated tics of Pakistan’s tax Imtiaz Bashir, FCMA
substantial real-time progress in tax imposition and system are organiza-
collection, digital identity linkage, and third-party data tional incompetencies, Senior Instructor of Commerce
consolidation (IMF, 2022). At the moment, Pakistan is in a limited tax base, and Government Graduate College
the phase of developing digital setups, followed by a continuous decline in of Commerce, Multan
implementing parallel data alignment through national tax revenue. Despite
databases like NADRA, SECP, FBR, and other utility many structural tax reform efforts, Pakistan’s tax-to-GDP
organizations such as WAPDA, Sui Southern Gas ratio has persistently remained the lowest in South
Pipelines, PTCL, WASA, etc. Asia—around 9.2% in recent years (World Bank, 2022). A
large economy in the region, Pakistan suffers from weak
Data analytics is not merely a technological
advancement but a modern modification in the system implementation of tax procedures and patchy datasets
of tax operationalization—the transition from a reactive that hinder tax receipts and widen compliance gaps.
system of taxation to a proactive one (Bird & Zolt, 2018). If Pakistan’s tax collection setup mainly depends on sales
Pakistan wants to overcome the problems of tax evasion, tax, which disproportionately burdens lower-income
data provision gaps, and unexplored revenue groups, while a significant portion of income tax often
possibilities, data analytics can provide new remains unexplored for various reasons (Ahmed &
arrangements for data provision, help curb tax evasion, Ahmed, 2021). Furthermore, data linkage among many
and increase tax revenue. government organizations such as SECP, NADRA, and
provincial tax authorities has largely remained
The Role of Data in Modern Tax Systems unattended, particularly in terms of profiling and
Data analytics has transformed the traditional real-time risk analysis.
audit-based tax system into a modern tax system, Fortunately, some steps such as the integration of IRIS and
enabling tax authorities to design risk-informed and the track-and-trace system show progress, but the system
proactive tax implementation strategies. This is only is undermined by political interference, weak tax morale,
possible when tax authorities integrate different sources and flaws in tax infrastructure. If Pakistan wants to
of data—such as utility companies, banks, and other enhance its tax revenues, it must adopt effective big data
social databases like NADRA—with the FBR. In this way, analytics; inter-agency collaboration is indispensable.
the state can more easily detect non-compliance
activities and distinguish between eligible and ineligible Sources and Types of Data for Tax Reform
taxpayers (Baer, 2011). Tax reforms help in utilizing macro-level data to improve
Computerization of tax procedures, online tax activities, the tax base, enhance compliance, and detect evasion.
and audits followed by inspection of taxpayer data will The main sources of data analytics include income tax
consequently lead to intentional data submission and return filings, records of incoming and outgoing customs
reduced evasion tendencies. It has been proven that transactions between countries, and domestic sales and
digital data integration is effective in expanding the tax purchase documentation, which reflect the behavior of
base (Kloeden, 2011). At the macro level, the use of data taxpayers in their country.
ICMA’s Chartered Management Accountant, Jul-Aug 2025 41