The Federal Board of Revenue (FBR) is working tirelessly to increase Pakistan’s tax base for the growth of the economy. Despite the fact that some people are paying taxes, those who are not properly documented are considered outside the tax net.
In this vein, the FBR is now authorized to obtain information through the National Database and Registration Authority (NADRA) to verify and analyze individuals who are not paying taxes but earning income. New powers have also been granted to the FBR to suspend the utility connections of non-filers.
However, the government and the FBR should strive to make it easier for taxpayers to declare their income and assets rather than threatening them with notices and audits.
What percentage of Pakistanis pay taxes?
There is speculation that only 1% of Pakistan’s population pays taxes, but this is not entirely true. There are two types of taxes in Pakistan: direct taxes and indirect taxes.
Direct taxes are payable on the income of the person earning. These include property tax, agriculture tax, income tax, corporate tax, wealth tax, and more.
Indirect taxes are paid by almost everyone in Pakistan. These include sales tax, service tax, custom duty, and other forms of withholding taxes. Every individual who purchases goods or services is required to pay these indirect taxes, even when buying groceries, oil, biscuits, or imported items. These taxes are also included in utility bills.
The importance of increasing Pakistan’s tax base
It is important to increase Pakistan’s tax base as it will help to generate revenue for the government, which can then be used to fund essential services such as education, healthcare, and infrastructure development. Moreover, increasing the tax base will reduce the burden on the existing taxpayers and help to promote fairness and equality in the taxation system.
FBR’s efforts to increase Pakistan’s tax base
The FBR has introduced several initiatives to increase Pakistan’s tax base, such as:
- Tax amnesty scheme: The FBR has launched a tax amnesty scheme to encourage non-filers to declare their income and assets without any penalty or legal action.
- Taxpayers’ facilitation portal: The FBR has established a taxpayers’ facilitation portal to facilitate taxpayers in filing their tax returns and resolving any issues related to taxation.
- Tax profiling system: The FBR has developed a tax profiling system to identify non-compliant taxpayers and monitor their tax payments.
- Benami transactions rules: The FBR has introduced benami transaction rules to curb the practice of holding assets under someone else’s name to evade taxes.
In conclusion, increasing Pakistan’s tax base is crucial for the country’s economic growth and development. The FBR’s efforts to increase the tax base are commendable, but more needs to be done to make the taxation system fair and efficient. It is the responsibility of every citizen to pay their taxes and contribute to the development of their country.