Friday 27 / December / 2024
Islamabad : The World Bank has called for an increase in tax collection from the major and vital sectors in Pakistan claiming that the tax collection is insufficient to meet its financial necessities, ARY News reported on Wednesday.
ARY news reported citing the report, that the tax-to-GDP ratio of progressive countries should be at least 15 percent but Pakistan has only 11.6 percent.
The World Bank has termed the tax collection in Pakistan, the lowest in the region and suggested that the tax collection is not improving in Pakistan.
It also suggested that the country should increase tax collection from major sectors and eliminate income tax, sale tax, and customs duties exemptions.
The World Bank has also proposed linking property tax rates to market values by connecting the land ownership record with national identity cards and national tax numbers. Along with the recommendation to eliminate exemptions on income tax, sales tax, and customs duties, the World Bank has suggested a standard GST (General Sales Tax) rate of 18% on various goods.
The report has proposed bringing individuals earning less than 600,000 rupees annually into the tax net. It also recommends imposing additional taxes on agriculture, property, real estate, retail, and the cigarette sector while reducing taxes on luxury items.
According to the World Bank, Pakistan is incurring significant losses in revenue due to tax concessions.
As Pakistan grapples with a severe economic crisis and soaring inflation, this financial safety net of the people of Pakistan appears eroding, Dawn reported.
These savings, whether in cash or assets like gold, were traditionally reserved for significant expenses such as weddings, unexpected illnesses, or business losses but families are finding themselves compelled to dip into their savings to cover daily necessities, including electricity bills, school fees, rent, and other essential expenses, Dawn reported.
Although the IMF approved a USD 3 billion bailout to support Pakistan in avoiding a default on its debt repayments, Islamabad is finding it difficult to implement all the conditions imposed by the lender.
