FBR
ISLAMABAD: The forthcoming ruling party, Pakistan Muslim League-Nawaz (PMLN), is pressing the Federal Board of Revenue (FBR) to formulate a comprehensive roadmap aimed at augmenting the tax-to-GDP ratio over the next five years.
Top officials from the FBR briefed PMLN leaders, including Senator Mussadiq Malik and Ahad Cheema, on the strategy. The PMLN leadership specifically urged the FBR to devise a roadmap that would elevate the tax-to-GDP ratio to a minimum of 13.5 percent within the next five years.
Sources reveal that the FBR has been tasked with prioritizing the digitization of the economy and leveraging information technology to bring potential sectors into the tax net. The emphasis on the digital economy is a key focus for the upcoming government.
Consequently, the FBR has been directed to initiate the documentation of the economy, coordinating efforts with institutions such as Nadra, SBP, and the Ministry of IT. This collaborative approach aims to utilize e-commerce and digitization as tools to expand the tax base.
Currently, the tax-to-GDP ratio stands at around 8.5 percent annually. The PMLN leaders seek input from the FBR to strategically increase this ratio, recognizing the need for a well-thought-out plan.
The next government’s ambitious goals include doubling revenue collection over a five-year period, targeting Rs9,415 billion by the end of June 30, 2024.
Additionally, proposed reforms involve reducing the maximum individual tax rate from 30 percent to 15 percent, raising the minimum tax threshold from Rs0.4 million to Rs1.2 million per year, and facilitating online tax payments through various channels, including cell phones, ATMs, and banks.
Furthermore, the government aims to strengthen the alternate dispute resolution mechanism, making decisions binding on both parties, and implement a Queue Management System to eliminate the discretionary system for sales tax refunds.
These measures collectively signify a comprehensive approach towards fiscal reforms and economic development in the coming years.
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