World Bank report highlights tax reforms in Pakistan
The World Bank has published a comprehensive report on tax
reforms in Pakistan.
The report suggests that the implementation of tax reforms
in Pakistan could potentially increase the share of taxes in the economy by two
percent. Moreover, by enhancing the collection of income tax related to
agricultural income, the share of taxes in the economy may see an incremental
one-percent rise.
Key findings from the report indicate that out of Pakistan's
114 million employed individuals, only 80 million are registered for income
tax. Furthermore, the contribution of direct taxes to the total tax revenue
stands at just 33%, with this category being the primary source of tax income.
World
Bank advocates taxing individuals earning less than Rs 50,000 a month
The World Bank report also underscores the impact of the low
real estate tax rates, which have contributed to high levels of investment.
Conversely, the manufacturing sector faces reduced investment due to its
dependence on real estate investments, given the relatively low land taxes in
Pakistani cities. The report also notes that vacant lots in cities are
particularly attractive for investment, given these conditions.
Pakistan
lags behind Developing Member Countries (DMCs) in preparation for digital
education
A striking revelation from the report is that approximately
90 percent of Pakistani farmers do not pay taxes. Many individuals derive
income from agricultural land for purposes other than farming, underscoring the
complexity of Pakistan's tax system. The report further highlights the ongoing
challenge of unclear boundaries between the federation and provinces in tax
matters, resulting in overlaps that affect tax collection efficiency.
The World Bank's insights serve as a valuable resource for
understanding the current state of tax reforms in Pakistan and the potential
avenues for improvement.
Source: https://irshivideos.com/