One has to wonder what the reason is for low rate of income tax payment.
ISLAMABAD: If official figures are to be believed, out of Pakistan’s 1.7 million taxpayers, around 1.6 million pay an average of about Rs21,000 each in income tax every year. And only 526 taxpayers paid over Rs5 million in income tax. One has to wonder what the reason is for this low rate of income tax payment, given that even a country like Pakistan has a reasonable number of individuals who earn a large enough amount in income to be eligible for paying over five million rupees in income tax every year.
If the FBR really wants to find out how much tax it should be getting, it should check property purchases in the best housing societies of major cities. This is important because if the government were able to widen the tax net and catch those who don’t pay their share of tax, there would be little reason to take anti-public measures such as the mini-budget that has been recently announced.
In any case, these are only stop-gap measures and do nothing to get at the root of the problem, which is the FBR’s inability to either catch tax evaders or widen the tax net. Furthermore, what is the organisation doing to reduce the level of corruption and inefficiency in its ranks since that is also a major factor in people not paying their fair share of taxes?
Viqarul Haq
Published in The Express Tribune, March 23rd, 2011.
