New Delhi, Feb 21 (IANS) When it comes to innovation in Pakistan, every new system, manual, or reform announcement struggles to escape the perception that it is designed as much to manage optics as to deliver results, according to a new report.

Business Recorder writes that the Federal Board of Revenue’s (FBR’s) latest attempt to tighten tax collection through a withholding mechanism on digitally ordered goods appears “sensible on paper”.

However, this initiative inevitably revives an older and far more fundamental question — “whether any new procedural innovation can succeed when the institution introducing it has steadily lost credibility on its core mandate”.

“Revenue performance has increasingly been framed in defensive terms, with targets routinely missed and ‘success’ recast as falling short by a narrower margin than the previous year,” said the report.

“An organisation tasked with expanding the tax base and lifting revenues has, instead, normalised underperformance,” it added.

The report argues that automation cannot compensate for institutional fragility, nor can intermediaries be expected to resolve failures rooted in governance and enforcement.

Each successive reform places greater responsibility on compliant actors operating within the formal economy.

The article states that payment firms, courier services and online platforms are asked to absorb new reporting obligations, shoulder compliance risks and act, in effect, as extensions of the tax authority.

“Meanwhile, vast segments of economic activity remain either lightly taxed or entirely untouched,” it laments.

It further adds that the burden deepens where compliance already exists, while the broader tax net remains stubbornly narrow.

This reflects a long-standing preference for administrative convenience over structural reforms.

“When taxpayers encounter complexity without corresponding improvement in outcomes, trust erodes. When rules change frequently, but revenue does not rise meaningfully, scepticism hardens. Over time, credibility becomes the rarest currency of all,” the article says.

Moreover, the article add that Pakistan’s revenue challenge is neither mysterious nor novel.

“It stems from a narrow base, weak documentation, political interference and inconsistent application of the law,” it says.

—IANS

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