The digitalization of Pakistan's tax system represents a crucial step towards improving tax administration, enhancing compliance, and reducing inefficiencies within the Federal Board of Revenue (FBR). However, this transition faces significant legal and administrative challenges. Legally, the existing tax framework needs extensive amendments to accommodate e-filing, electronic payments, and digital audits, raising concerns about data privacy, security, and authenticity of digital records. Administratively, FBR must address issues such as the lack of digital literacy among taxpayers, resistance to change, and the need for robust cybersecurity measures to protect sensitive financial data. Furthermore, the automation of tax processes requires careful coordination between various government agencies to ensure smooth interoperability and compliance monitoring. This paper explores these challenges and emphasizes the need for a comprehensive approach that includes legal reforms, technological upgrades, and awareness programs to facilitate the successful implementation of a digital tax system in Pakistan.
Shaheen Fatima (Thu,) studied this question.