The Financial Implications of Information Technology in Enhancing FBR’s Performance: Moderating Role of Fiscal Policy Effectiveness

Abstract

Administration of tax using Information Technology (IT) is paramount in increasing efficiency, transparency, and revenue collection. The paper explores the financial consequences of Information Technology to the performance of Federal Board of Revenue (FBR) in Pakistan with specific reference to moderating effect of Fiscal Policy Effectiveness. The positivist philosophy and the deductive approach were used to carry out a quantitative cross-sectional survey after which 119 respondents (FBR officials and taxpayers) were involved. The correlation, regression, and moderation analysis in SPSS were used to analyze data. The findings indicate a considerable, a strong positive effect of Financial Information Technology (FIT) on FBR Performance (FBRP) ( 990, p <.001), and IT is an important predictor of performance, explaining 93.2% of its variance. Nevertheless, the moderating role of Fiscal Policy Effectiveness (FPE) on the relationship was small, although statistically significant (interaction coefficient =.0130). This implies that as much as IT is one of the paramount direct contributors to the operation and financial performance of FBR, the current fiscal policy frameworks have minimal contribution of improvement to this relationship. The research finds that the most significant lever to change the efficacy of FBR is strategic investment in innovative IT systems, including AI and blockchain and advanced data analytics, and it is the fiscal policy changes that should have a more significant supportive role.

Keywords:

Information Technology, Federal Board of Revenue (FBR), Fiscal Policy, Tax Administration, Moderation Analysis, Digital Transformation.