Pakistan Federal Tax Commission Reduces Tax Collection Expectations

The government of Pakistan has a multi pronged approach to increase tax revenue. First, the new tax item is proposed to levy 17% sales tax on clothing, carpets, leather, sports products and other commodities in fiscal year 2020. The two is to raise the level of tax collection and management. It is proposed that tax registration be carried out by establishing the linkage mechanism of information sharing among relevant departments. The three is to encourage consumers to make consumer receipts certification to the tax authorities, and those who have passed the certification will be given 5% of the tax payment. Four, we should adjust the tax target, reduce the tax burden of the entity manufacturing industry, and focus on the high assets and high-income groups.

However, due to the following factors, the government of Pakistan is expected to achieve expected tax revenue: first, the information between the relevant departments has not been fully shared, and the situation of taxable and untaxed enterprises can not be fully grasbed. Two, inadequate collection and management resources and heavy workload of grass-roots personnel seriously restrict the improvement of collection and management level. To this end, the Federal Tax Commission (FBR) has reduced its expectations in a timely manner, and completed 10% unregistered business registration procedures in 2 years.