SHAFAQNA PAKISTAN (Shia News Agency)
Pakistan’s taxation system has failed to safeguard the common interests of taxpayers, policy makers, and tax administrators and boosting tax collection is necessary to overcome macroeconomic weaknesses and sustain development. Similarly Revenue collection procedure seems to be one of the typical remains of colonial era in Pakistan. The ambiguity of its objectives is very clear as the tax system is designed on the basis of achieving the target without having to know who is liable to pay and how much someone has to pay. Also the use of discretionary powers given to the tax bureaucracy to grant exemptions to selected parties is worsening the situation. Over time, the number of exemptions granted and the amount of tax revenue lost as a result has grown to such enormous proportions that it rivals some of the largest expenditure heads in the budget. It stands to reason that only those with the right connections can avail themselves of the benefits of selective exemption, meaning that the poor, who pay their share of taxes through the GST levied on all items of daily consumption, are left at a disadvantage. The chairman of the Federal Board of Revenue recently found an occasion to dilate upon the government’s efforts to roll back these exemptions in a meeting with officials from the office of the Auditor General of Pakistan. He reminded the AGP officers that his government has rolled back close to Rs100bn worth of exemptions, and intends to roll back another Rs250bn worth in the coming years. This is not a new issue. It has been the subject of donor advice since at least the early 1980s. Most recently, the commerce minister touched on it again when talking at the launch of a new report that shows very high levels of inequality in the country, where the top 10pc has a 31pc share in total spending, while the bottom 40pc spend only 20pc. The fiscal machinery has a role to play in helping close the growing inequalities in the country, most importantly by helping to document large sectors, but also by making revenue available for directed social welfare programmes, areas highlighted by the report as important dimensions of inequality. There is a need of political will to remove such flaws from tax system.
pakistan.shafaqna.com
