The World Bank (WB), Pakistan is not collecting as much tax as it should.
World Bank advises tax reforms in Pakistan: The World Bank stated in its report that Pakistan’s tax collection falls short of Rs737 billion and asked Islamabad to end all tax exemptions to lessen the burden of debt.
The World Bank has advised Pakistan to raise tax revenues from retail, real estate, and agricultural activities in order to raise more money. The international lender argued that provincial governments should tax the majority of the untaxed wealth concentrated in two important sectors of the provincial jurisdiction: real estate and agriculture.
According to the survey, Pakistan’s real estate industry is also paying 402 billion rupees more in taxes than it should be.
The bank also advised Pakistan to streamline its income tax system while maintaining progressivity, including harmonising it for both paid and non-salaried individuals.
Furthermore, there is a suggestion to raise the Federal Excise Duty on cigarettes in order to generate up to Rs268 billion in taxes from the industry.
Earlier, the World Bank suggested reducing various subsidies to save money, noting that the Tariff Differential Subsidy (TDS) can save 167 billion rupees.