Broadening The Tax Base: Expert Strategies To Tackle Revenue Challenges

Experts Propose Strategies to Broaden Pakistan’s Tax Base Amidst Economic Challenges

Experts have highlighted the urgent need to expand Pakistan’s tax base and bring a broader range of sectors under the tax net to address the country’s economic challenges.

Panel Discussion: Geo News’ ‘Great Debate’

During a live discussion on Geo News’ “Great Debate” program, former finance minister Miftah Ismail and other financial and economic experts discussed the significance of broadening the tax base and proposed various solutions.

Miftah Ismail: Tax Expansion and Fiscal Responsibility

Ismail emphasized the importance of expanding the tax net to support public services and development initiatives. He lamented the underutilization of the outgoing fiscal year and stressed that the tax-to-GDP ratio, while projected to reach 10% this year, remains insufficient. He also identified sectors such as gold and real estate that require increased tax contributions, advocating for simplified tax systems and stakeholder involvement.

Shabbar Zaidi: Targeting Electricity Consumers and Industrial Tax Compliance

Former FBR chairman Shabbar Zaidi proposed bringing electricity consumers into the tax net through tax collection at the time of acquiring power connections. He highlighted the low compliance rate among industrial consumers, with only 100,000 out of 3 million filing tax returns. Zaidi emphasized the need for property surveys and a comprehensive overhaul of the political system to facilitate meaningful change in the tax collection system.

Atiq Mir: Engagement with Traders and Addressing Taxpayer Concerns

All Karachi Tajir Ittehad Chairman Atiq Mir urged traders to become filers for their own benefit. He criticized policies made without consultation and called for a collaborative approach between the government and business sector. Mir acknowledged the challenges faced by small traders and emphasized the need to address their concerns and streamline the tax filing process.

Ammar Habib Khan: Digital Payments and Elimination of Cash Economy

Economic expert Ammar Habib Khan advocated for the elimination of cash transactions and the promotion of digital payments to reduce tax evasion. He suggested banning cash transactions exceeding Rs5,000, recognizing that gold traders may resist such measures but proposing a system to mitigate their concerns.

Khalid Khokhar: Support for the Agriculture Sector

Pakistan Kisan Ittehad President Khalid Khokhar highlighted the neglect of the agriculture sector and the low profitability experienced by farmers. He attributed high production costs to the sector’s decline and urged the government to reduce these costs for farmers to thrive. Khokhar also opposed the imposition of sales tax on agricultural inputs, arguing that it would further hinder the sector’s growth.