Pakistan’s tax collection insufficient to meet financial needs: World Bank

The World Bank has called for an increase in tax collection from Pakistan’s core and vital sectors, claiming that tax collection is insufficient to meet its financial needs, ARY News reported on Wednesday.

ARY News reported, citing the report, that the tax-GDP ratio of progressive countries should be at least 15 percent, but Pakistan has only 11.6 percent.

The World Bank rated tax collection in Pakistan as the lowest in the region and suggested that tax collection is not improving in Pakistan.

He also suggested that the country should increase tax collection from major sectors and eliminate exemptions from income tax, sales tax and customs duties.

The World Bank has also proposed linking property tax rates to market values ​​by connecting land ownership registration with national identity cards and national tax numbers. Along with the recommendation to remove exemptions from income tax, sales tax and customs duties, the World Bank has suggested a standard GST (general sales tax) rate of 18% for various goods.

The report proposes to bring people earning less than Rs 600,000 a year into the tax net. It also recommends imposing additional taxes on agriculture, property, real estate, retail trade and the cigarette sector, while reducing taxes on luxury goods.

According to the World Bank, Pakistan is suffering significant revenue losses due to tax concessions.

As Pakistan faces a severe economic crisis and soaring inflation, this financial safety net of the people of Pakistan appears to be eroding, Dawn reported.

These savings, whether in cash or assets such as gold, were traditionally reserved for major expenses such as weddings, unexpected illnesses or business losses, but families are forced to dip into their savings to cover daily needs, including electricity bills. , school fees, rent and other essential expenses, Dawn reported.

Although the IMF approved a $3 billion bailout to help Pakistan avoid a debt default, Islamabad is finding it difficult to implement all the conditions imposed by the lender.