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Pakistan makes moves to widen tax net

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Pakistan makes moves to widen tax net

By Masroor Gilani, AFP
March 9, 2015, 12:01 am TWN

ISLAMABAD--Pakistan has begun chasing wealthy tax-dodgers who enjoy lives of extravagance and luxury, but revenue officials face huge challenges in trying to force the very richest — and most influential — to pay up.

Pakistan's tax-to-GDP ratio of 9.5 percent is among the lowest in the world and the government is under pressure from foreign donors and lenders, including the International Monetary Fund (IMF), to increase collection to boost the struggling economy.

Revenue authorities say they have identified about a quarter of a million new taxpayers who they project will add around 14 billion rupees (US$140 million) to government coffers.

Broadening the tax base and improving the economy after years of drift and sluggish growth under the last government was a key pledge in Prime Minister Nawaz Sharif's 2013 election campaign, when he was swept to power for a third time.

Currently less than one percent of Pakistanis pay income tax and the government collected just US$8 billion in total income tax in the 2013-14 fiscal year — barely enough to cover just the country's defence expenditure of US$7 billion.

The finance ministry is aiming to boost the tax-to-GDP ratio to 15 percent in the current fiscal year ending June 30.

As part of those efforts, the Federal Bureau of Revenue (FBR) is compiling lifestyle and vehicle data to try to trace unregistered taxpayers, including wealthy landlords and businessmen zipping between their luxury homes in imported Mercedes.

“We are collecting information from the vehicle registration authority, car manufacturers, utility companies, telecom companies and property registration offices and tracing people who are not paying any tax,” FBR spokesman Shahid Hussain told AFP.

Taxpayer Profiles

The data is used to generate profiles of potential taxpayers, after which demands are issued for them to pay income tax.

“FBR has already issued notices to 261,250 potential tax payers,” Hussain told AFP, adding that that new taxpayers have paid 570 million rupees since the crackdown started.


Excerpt: Pakistan makes moves to widen tax net - The China Post


PM Nawaz Sharif making progress in broadening the tax net, something PM Musharraf began in his tenure.
 
The day they bring the agricultural tax into the country is the day we will begin to have increased tax revenues. I wonder if most of our parliamentarians are able to live of the agricultural land why is it not taxed. Have a lower limit of earning or minimum land to make sure the poorer farmers are not effected then tax the rest.

“FBR has already issued notices to 261,250 potential tax payers,” Hussain told AFP, adding that that new taxpayers have paid 570 million rupees since the crackdown started.
This is good news I hope they manage to broaden the tax net and decrease taxes on things like telecommunication etc, those are just foolish.
 
This drama had happened last year, and before that too and nothing came out. Thieves don't catch thieves, and if someone thinks they do, he maybe living in denial.
 
This drama had happened last year, and before that too and nothing came out. Thieves don't catch thieves, and if someone thinks they do, he maybe living in denial.

Well the entire system has "thieves" all over it, everyone in their own way and through their power...from the military to the opposition, all of them (outside of the current COAS). So what's your alternative recommendations? Let's try to solve this issue vs. keep talking about it.

Someone has to start somewhere, magic and 100% compliance can't happen over night....
 
Pakistan makes moves to widen tax net

By Masroor Gilani, AFP
March 9, 2015, 12:01 am TWN

ISLAMABAD--Pakistan has begun chasing wealthy tax-dodgers who enjoy lives of extravagance and luxury, but revenue officials face huge challenges in trying to force the very richest — and most influential — to pay up.

Pakistan's tax-to-GDP ratio of 9.5 percent is among the lowest in the world and the government is under pressure from foreign donors and lenders, including the International Monetary Fund (IMF), to increase collection to boost the struggling economy.

Revenue authorities say they have identified about a quarter of a million new taxpayers who they project will add around 14 billion rupees (US$140 million) to government coffers.

Broadening the tax base and improving the economy after years of drift and sluggish growth under the last government was a key pledge in Prime Minister Nawaz Sharif's 2013 election campaign, when he was swept to power for a third time.

Currently less than one percent of Pakistanis pay income tax and the government collected just US$8 billion in total income tax in the 2013-14 fiscal year — barely enough to cover just the country's defence expenditure of US$7 billion.

The finance ministry is aiming to boost the tax-to-GDP ratio to 15 percent in the current fiscal year ending June 30.

As part of those efforts, the Federal Bureau of Revenue (FBR) is compiling lifestyle and vehicle data to try to trace unregistered taxpayers, including wealthy landlords and businessmen zipping between their luxury homes in imported Mercedes.

“We are collecting information from the vehicle registration authority, car manufacturers, utility companies, telecom companies and property registration offices and tracing people who are not paying any tax,” FBR spokesman Shahid Hussain told AFP.

Taxpayer Profiles

The data is used to generate profiles of potential taxpayers, after which demands are issued for them to pay income tax.

“FBR has already issued notices to 261,250 potential tax payers,” Hussain told AFP, adding that that new taxpayers have paid 570 million rupees since the crackdown started.


Excerpt: Pakistan makes moves to widen tax net - The China Post


PM Nawaz Sharif making progress in broadening the tax net, something PM Musharraf began in his tenure.
LoL
additional 14 billions rupees only?
God bless our Country, PKR 27 billion is being spent on 7 km road in Lahore only. From this example, you can imagine how much this 14 billion is for a Country, the size of Pakistan.
The Government and Bureaucrats are just doing "look busy do nothing" game. Everyone know, the real tax evaders. Who issue SROs to exempt tax and who are the beneficiaries?
Where is the income tax of Professionals like doctors & Lawyers? Who earn in millions per week?
Who will check the income tax returns of big retailers and traders of markets like Saddar, Liberty, Shah Alam, Akbari mandi?
Who will get income tax from big land holders of Sindh and Punjab?
Who will fight with the mafias and trade unions?
Will there ever be a day, when tax id and CNIC will be the same? So that one can check how much bank transactions, foreign travels, property transactions, elite clubs memberships etc. one CNIC holds. Whose Kids are studying in expensive American system and do their tax returns match their life style or not?
 
@Rajput_Pakistani

It is a systematic process and takes time, the tax net will broaden to include many bazaars and companies and other tax evaders. Point of this is that these people are now registered with in the tax base and that creates a steady source of tax revenue.
 
We have lowest tax to GDP ratio in region. Highest indirect taxes that are increasing each year.
 
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