Page 48 - CMA Journal (July-August 2025)

Focus Section

6) Data Literacy: Advanced systems require trained dashboards must be deployed to provide real-time
officers who can interpret analytics. India’s GST rollout compliance insights and sectoral revenue analytics.
succeeded partly due to capacity building for officers. 3) Phase 3 (Years 3-4)- Risk-Based Enforcement: With
Pakistan could add 0.3–0.5% of GDP by strengthening the integration layer in place, enforcement should
analytical skills. progress from manual selection to AI-powered risk
7) Advanced Analytics: Machine learning can detect profiling. Taxpayers can be assigned risk scores based
fraud patterns at scale—false invoicing, on transaction histories, cross-matched data, and
underreporting, and shell companies. India’s sector risk levels. Targeted audits should focus on
AI-powered GSTN prevented fraudulent claims worth high-leakage sectors such as real estate, imports, and
USD 6 billion. Similar deployment in Pakistan could high-turnover retail. This must ensure precise
secure 0.8–1% of GDP. enforcement with minimal disruption to compliant
8) Emerging Technologies: Blockchain can secure taxpayers.
high-risk sectors like real estate, imports, and excise. 4) Phase 4 (Years 4-5)- Predictive Analytics & Culture
Estonia’s blockchain-backed tax system ensures Change: The final phase emphasizes creating a
tamper-proof records. Pakistan could combine proactive compliance environment. Predictive
blockchain with cloud scalability to protect 0.2–0.3% models can estimate revenue risks and detect
of GDP. emerging compliance gaps. Pre-filled tax returns
Collectively, these measures could raise Pakistan’s enabled by real-time third-party data will simplify
tax-to-GDP ratio from the current 9% to 14–15% over filing, improve voluntary compliance, and reduce
five years without increasing tax rates. The errors. Institutionalizing data literacy across the FBR
transformation lies in leveraging data and technology to will ensure that technology and analytics are fully
maximize existing potential. embedded into day-to-day operations.
Collectively, this phased approach can add PKR 5–6
Table 3: Tools & Poten al Revenue Impact trillion annually to Pakistan’s revenues over five years. It
Tool Financial Impact Annual Revenue can raise the tax-to-GDP ratio to sustainable levels
(% of GDP) Poten al (PKR) without increasing tax rates.
Data Governance 0.5% 300 billion
Data Quality Improvement 0.5–1% 300–600 billion Conclusion
Third-Party Integra on 1.5–2% 900b–1.2 trillion
Data Warehouse & BI 0.5–0.8% 300–480 billion Table 4: Roadmap & Revenue Gains
Risk Profiling 0.8–1% 480–600 billion Phase Reform Ac on Poten al Gain (PKR)
Data Literacy 0.3–0.5% 180–300 billion Years 1–2 Data governance, cleaning, valida on 300 billion
Advanced Analy cs 0.8–1% 480–600 billion
Emerging Technologies 0.2–0.3% 120–180 billion Years 2–3 Integra on, infrastructure 600–900 billion
Years 3–4 Risk-based enforcement 900-1200 billion
Roadmap for Implementation Years 4–5 Predic ve analy cs, culture change 300–480 billion
A structured, phased approach is crucial for transforming
Pakistan’s tax system into a fully data-driven ecosystem. The Globally, the case is clear: the US, UK, China, India, and
roadmap must build on strong foundations, scale through Bangladesh have leveraged data to transform their
integration, and mature with predictive capabilities. Each revenue systems. Their experiences demonstrate that
phase should deliver measurable fiscal outcomes, ensuring integration, analytics, and risk-based enforcement
reforms are both sustainable and credible. deliver measurable gains. Pakistan already has the
infrastructure, partial reforms, and technical capacity.
1) Phase 1 (Years 1-2)- Building the Data Foundation: What remains missing is full integration, strong
The initial two years should focus on strengthening governance, and sustained political commitment.
the data infrastructure. Launching a Corporate Data
Office (CDO) will provide centralized oversight of all Leveraging data is no longer a choice—it is the
tax-relevant datasets. Cleaning the taxpayer registry, foundation for fiscal stability, equity, and sustainable
eliminating duplicates, updating addresses, and growth. With a clear roadmap, Pakistan can raise its
verifying ownership details through NADRA and SECP tax-to-GDP ratio to 13–14% within five years, mobilizing
will be critical to improving data accuracy. Parallel PKR 3–4 trillion annually without increasing tax rates. The
efforts should include formalizing legal agreements world has already shifted to data-driven tax systems.
for real-time data sharing with NADRA, SBP, SECP, Pakistan’s path to fiscal stability lies in fully utilizing data
provincial tax bodies, utilities, and telecom operators. as a reform tool, transforming revenue mobilization from
a persistent challenge into a sustainable growth engine.
2) Phase 2 (Years 2-3)- Integration & Infrastructure
Deployment: Once data quality is ensured, the focus About the Author: The writer is an Associate Member of ICMA and
should shift to integration. The launch of a National currently serves as Manager of Litigation and Audit at Sui Southern Gas
Tax Intelligence Platform (NTIP) will consolidate Company Limited (SSGCL), Karachi. Previously, he worked as In-Charge of
datasets into a unified warehouse. APIs should be Taxation at the Utility Stores Corporation of Pakistan. With over 17 years
of extensive experience in tax operations and litigation in Pakistan, he
developed for seamless data exchange with
brings a wealth of expertise to his current role.
third-party entities. Business Intelligence (BI)
46 ICMA’s Chartered Management Accountant, Jul-Aug 2025