Punjab Plans FBR-Style Tax Body in Major Revenue Overhaul

LAHORE: Punjab has announced plans to create a centralised revenue authority modelled on the Federal Board of Revenue, marking one of the province’s most significant tax-administration reforms under the 2026-27 budget framework.

Punjab Finance Minister Mian Mujtaba Shujaur Rehman disclosed the plan during a post-budget press conference in Lahore, saying the new arrangement would bring different provincial revenue streams under one institutional structure. The move is being presented as part of a broader effort to improve tax collection, reduce administrative overlap and strengthen fiscal discipline.

The finance minister said Punjab had achieved 99 percent of its tax collection target during the outgoing fiscal year and had now raised its revenue target for FY2026-27 by 46 percent. He also projected that the province’s own-source revenues could increase by 30 to 40 percent through improved collection systems, digitisation and a wider tax base.

Rehman said the provincial government’s revenue performance had improved after steps to reduce corruption and modernise collection mechanisms. He pointed to stronger results from the Punjab Revenue Authority, the Excise and Taxation Department, and non-tax revenue departments, with mines and minerals emerging as a major contributor.

Under the new fiscal plan, the Punjab Revenue Authority has been assigned a collection target of Rs528 billion, while the Excise and Taxation Department has been given a target of Rs124 billion. Non-tax departments are expected to generate Rs461 billion, reflecting the province’s growing reliance on internal resource mobilisation.

The minister also defended proposed changes in some existing tax rates, saying many of the levies had remained unchanged for decades. He said revisions in agricultural tax would apply only to landholdings above 12.5 acres, while property tax and other collections would increasingly shift to digital platforms to improve transparency and limit manual discretion.

Punjab’s fiscal choices have also been shaped by its decision to provide a Rs546 billion grant to the federal government. According to the minister, this contribution reduced the province’s development budget from Rs1.24 trillion to Rs752 billion, but he insisted that core public services and development priorities would not be abandoned.

Senior Minister Marriyum Aurangzeb used the briefing to reject criticism that agriculture and south Punjab had been ignored in the budget. She said the government was investing in data-based social protection systems, including a unified socio-economic registry designed to streamline welfare cards such as the Himmat and Kisan cards.

The proposed FBR-style provincial authority could reshape how Punjab collects, tracks and enforces taxes at a time when provinces are under growing pressure to finance development from their own revenues. If implemented effectively, the system may improve compliance, reduce leakages and give the province more predictable fiscal space for public spending.

The next challenge will be execution. The government will need to define the powers of the new authority, integrate existing departments, protect taxpayers from duplication and ensure that digital reforms translate into easier compliance rather than heavier bureaucratic control.