FBR to Recruit Retired Military Personnel for Tax Enforcement: Strategy, Implications, and What It Means for Pakistan Tax Landscape

1. Introduction

The Federal Board of Revenue (FBR)—Pakistan’s principal tax authority—is initiating a bold move by hiring retired military personnel to support tax enforcement operations. This initiative, announced on June 11, 2025 (Source), aims to enhance the agency’s reach and efficiency by integrating the discipline and field expertise of ex-servicemen.

2. Why FBR is Hiring Retired Military Personnel

There are several reasons behind this unprecedented move:

• Workforce Limitations: FBR suffers from manpower shortages, leading to poor enforcement in tax-deficient regions.
• Operational Discipline: Ex-soldiers bring structured discipline and a corruption-resistant mindset.
• Nationwide Presence: Their readiness to work in remote areas addresses enforcement gaps.

This plan complements broader digital transformation initiatives at FBR, designed to improve data handling and audit efficiency.

3. How the Scheme Will Work

While full implementation details are pending, the structure is expected to resemble:

• Eligibility: Retired army personnel within 5 years of service completion, with good conduct records.
• Duration: One- to three-year contracts, renewable based on performance.
• Duties: Include on-ground audits, verification visits, assisting in data gathering, and helping field offices track non-filers.
• Training: FBR plans to provide extensive orientation on tax laws, tools like the Iris system, and civil engagement protocols (FBR IRIS Portal).

Deployment is expected to start in urban and semi-urban regions of Punjab and Sindh before rolling out nationwide.

4. Benefits of Involving Ex-Military Officers

Here’s why this strategy could be a game-changer:

1. Enhanced Accountability: Their structured training promotes high integrity and executional discipline.
2. Neutral Administration: Ex-military officials are less likely to be influenced by political or internal pressures.
3. Tactical Reach: Their experience allows operations even in politically sensitive or remote areas.
4. Best Practice Models: Countries like India have used a similar approach in sensitive enforcement zones (India's Use of Ex-Army for Civil Duties – ThePrint).

5. Challenges & Risks

However, there are several challenges that must be addressed:

• Role Transition Issues: Adjusting from military to civil tax enforcement is not seamless.
• Training Demands: Intensive and ongoing training is essential to equip them for tax-specific duties.
• Legal Standing: Their classification (contractor vs. public servant) must be clarified to avoid jurisdictional issues.
• Budgetary Constraints: Hiring ex-army personnel will incur administrative and training costs.
• Public Sentiment: Civil-military role blending might raise concern among stakeholders unless transparently communicated.

6. Current Context & Data

FBR’s move comes amid persistent pressure to boost tax revenues and meet IMF-mandated fiscal targets. According to the IMF Extended Fund Facility Report, Pakistan aims to improve its tax-to-GDP ratio from ~11% in FY2024 to 13% by FY2025.

In comparison:

• India: ~17%
• Bangladesh: ~10%
• Nepal: ~9%

This initiative forms part of a broader framework, alongside digitization, the track-and-trace system, and the AI-based audit selection system.

To support compliance, the government is also emphasizing tools and practices for citizens—see our article on Tax Compliance in Pakistan: Best Practices & Tools.

7. Frequently Asked Questions (FAQs)

Q1: Who qualifies for the program?

Retired army personnel, ideally within 5 years of service completion, free from disciplinary actions.

Q2: What is the tenure of service?

Contract periods will range from 1 to 3 years, with options for renewal or promotion to supervisory roles.

Q3: What responsibilities will they have?

Field audits, assisting local tax offices, following up on non-filers, verifying suspicious cases, and data reporting.

Q4: Are they replacing FBR staff?

No. Their role is supplementary, aimed at boosting physical enforcement where FBR lacks presence or manpower.

Q5: How will they be paid?

They’ll be compensated under special contracts, likely funded through FBR’s administrative budget or external support (such as from IMF reform funds).

8. Actionable Advice

For Taxpayers:

• Stay Updated: Keep abreast of changes in tax enforcement and respond promptly to field verification notices.
• Maintain Documentation: Ensure you have organized records to present during field audits.
• Use Online Tools: Leverage the FBR IRIS portal for returns, status checks, and correspondence.

For FBR & Policymakers:

• Define Clear KPIs: Monitor performance based on recoveries, field inspections, and taxpayer feedback.
• Launch Pilot Programs: Start in select regions and scale based on feedback.
• Boost Transparency: Publicly share program guidelines to avoid confusion or fear.
• Collaborate with Think Tanks: Engage experts like PIDE and World Bank Tax Diagnostics for unbiased analysis.

9. Conclusion

The FBR’s strategic decision to incorporate ex-military officers into its enforcement strategy could significantly uplift tax compliance, especially in high-risk and low-compliance areas. However, success hinges on training, legal clarity, and public communication. If implemented with precision, this model could transform Pakistan’s tax culture and meet fiscal benchmarks under both national and international scrutiny.