The World Bank (WB) has a report that says Pakistan is not collecting enough taxes. Pakistan is not collecting 737 billion rupees in taxes that it could be collecting. The WB says that Pakistan should close all tax exemptions and increase tax income from agriculture, real estate, and retail businesses. The WB also says that Pakistan should simplify its income tax structure and increase the Federal Excise Duty on cigarettes.
The World Bank says that Pakistan is not collecting enough taxes from its citizens and businesses. This is because there are too many tax exemptions and because the tax system is too complicated. The World Bank recommends that Pakistan close all tax exemptions, simplify the tax system, and increase taxes on agriculture, real estate, retail businesses, and cigarettes. This would help Pakistan to raise more money to pay for its debts and to invest in public services.
Here is a breakdown of the WB's recommendations:
- Close all tax exemptions: This would mean that all businesses and individuals would have to pay their fair share of taxes, regardless of their industry or income level.
- Increase tax income from agriculture, properties and retail businesses: These sectors are currently undertaxed in Pakistan. Increasing taxes on these sectors would help to raise more revenue and reduce the tax burden on other sectors.
- Simplify the income tax structure: The current income tax system is complex and difficult to understand. Simplifying the system would make it easier for businesses and individuals to comply with their tax obligations.
- Increase the Federal Excise Duty on cigarettes: This would help to reduce smoking rates and raise more revenue for the government.
The WB also recommends that Pakistan cut various subsidies to save money. This would free up more resources for the government to invest in public services.
