World Bank sees Pakistan’s tax system unfair and absurd

The World Bank (WB) has described Pakistan’s tax system as “highly unfair and vulgar” and stressed that property should be effectively brought into the tax net and it should be properly registered and taxed.

According to the bank, the growing burden on the salaried class can only be reduced if the tax net is expanded and all incomes are included in it.

It further said that there is a need to reform the tax system because the current system is yielding short-term benefits but long-term income opportunities are being wasted.

Regarding expenditure, PIED Vice Chancellor Nadeem Javed revealed that 40 per cent of the development budget is wasted in the form of commission because no bill is cleared without the Auditor General of Pakistan (AGPR) by giving 5 to 7 per cent commission.

He said: “This is a fact and everyone knows. Tobias Hawke, World Bank’s lead country economist, said at a panel discussion of the PIED-sponsored conference “Pakistan’s Financial Path: Promoting Transparency and Trust” in Islamabad: “Taxing at the provincial level on agricultural income is a positive step, now the property sector should also be properly registered and brought into the tax net.” Expanding the tax net through the digital system and adding all incomes can pave the way for reducing the burden on the salaried class.

He expressed surprise that only five million people in a population of 24 crore file tax returns, and most of the tax is collected in the form of General Sales Tax (GST).