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KARACHI: The government has planned to streamline its direct and indirect taxes and broaden the tax base manifold in the next two years to improve efficiency and generate more revenues, officials said on Wednesday
Federal Finance Minister Ishaq Dar has constituted a high-powered committee, comprising stakeholders from trade bodies, tax professionals and lawyers with the aim to improve the taxpayers’ base by at least threefold in the next two years.
According to a notification of the Finance Division, the finance minister constituted the Committee on Broadening of Tax Base.
The committee has been tasked to review and rationalise direct and indirect taxes with a view to broaden the tax net. Besides it will recommend and discuss new tax measures.
The committee has been constituted to provide input on different tax policy issues, enabling the government to adopt a pluralistic view representing divergent interest group, and at the same time, enhance tax revenues.
Further, the committee will deliberate upon and suggest measures to broaden the tax net.
The committee has been mandated to propose legislation, which would minimise opposition and increase compliance with the law and assist in any other task assigned by the finance minister.
Tax base in Pakistan is extremely low despite measures taken by the government. As per the Active Taxpayer List (ATL) on the FBR website of October 14, 2014 relating to Tax Year 2013, the taxpayers were 835,220, whereas as per the ATL on FBR website of May 15, 2015 relating to the Tax Year 2014, the taxpayers on the active list were 736,272.
Comparing the two lists, the revenue authority has lost around 98,948 active taxpayers in a year. The situation is worrisome for the government as the workforce of 20,000 persons in the FBR had failed to increase the tax base.
The decline in the number of active taxpayers come despite measures taken in the Federal Budget 2014, which made higher rate of tax deduction from non-active taxpayers and more collection of third party information mandatory.
The tax base on the sales tax side is even worse. As per the sales taxpayer status data for June 2014, the total number of enrolled sales tax persons was 119,088, of which the total filers were 101,526. But the more worrisome numbers relating to the sales tax was that the total number of payment filers and nil filers was less than 54,000.
As per the ATL for the tax year 2014, of the total number of taxpayers who filed the tax returns, 38 percent paid zero tax and 68 percent in total paid less than Rs20,000 as tax. The total number of entities paying Rs1,000,000 and above as tax was 32,031.
When contacted, one of the members of the committee Abid Shaban said looking at the extremely low tax base, with proper strategy and commitment and robust IT support, it is not difficult to triple the tax base in the next two to three years.
He expressed the hope that the FBR will provide full support and dedicate over 30 percent of its Inland Revenue workforce towards this task of broadening the tax base. He also emphasised the need to deepen the tax base.
Dar forms committee to triple tax base in next two years - thenews.com.pk
Federal Finance Minister Ishaq Dar has constituted a high-powered committee, comprising stakeholders from trade bodies, tax professionals and lawyers with the aim to improve the taxpayers’ base by at least threefold in the next two years.
According to a notification of the Finance Division, the finance minister constituted the Committee on Broadening of Tax Base.
The committee has been tasked to review and rationalise direct and indirect taxes with a view to broaden the tax net. Besides it will recommend and discuss new tax measures.
The committee has been constituted to provide input on different tax policy issues, enabling the government to adopt a pluralistic view representing divergent interest group, and at the same time, enhance tax revenues.
Further, the committee will deliberate upon and suggest measures to broaden the tax net.
The committee has been mandated to propose legislation, which would minimise opposition and increase compliance with the law and assist in any other task assigned by the finance minister.
Tax base in Pakistan is extremely low despite measures taken by the government. As per the Active Taxpayer List (ATL) on the FBR website of October 14, 2014 relating to Tax Year 2013, the taxpayers were 835,220, whereas as per the ATL on FBR website of May 15, 2015 relating to the Tax Year 2014, the taxpayers on the active list were 736,272.
Comparing the two lists, the revenue authority has lost around 98,948 active taxpayers in a year. The situation is worrisome for the government as the workforce of 20,000 persons in the FBR had failed to increase the tax base.
The decline in the number of active taxpayers come despite measures taken in the Federal Budget 2014, which made higher rate of tax deduction from non-active taxpayers and more collection of third party information mandatory.
The tax base on the sales tax side is even worse. As per the sales taxpayer status data for June 2014, the total number of enrolled sales tax persons was 119,088, of which the total filers were 101,526. But the more worrisome numbers relating to the sales tax was that the total number of payment filers and nil filers was less than 54,000.
As per the ATL for the tax year 2014, of the total number of taxpayers who filed the tax returns, 38 percent paid zero tax and 68 percent in total paid less than Rs20,000 as tax. The total number of entities paying Rs1,000,000 and above as tax was 32,031.
When contacted, one of the members of the committee Abid Shaban said looking at the extremely low tax base, with proper strategy and commitment and robust IT support, it is not difficult to triple the tax base in the next two to three years.
He expressed the hope that the FBR will provide full support and dedicate over 30 percent of its Inland Revenue workforce towards this task of broadening the tax base. He also emphasised the need to deepen the tax base.
Dar forms committee to triple tax base in next two years - thenews.com.pk
