‘Tax evaders should face harsh punishment’
Low tax-to-GDP ratio causes Rs800b revenue loss annually.
KARACHI:
Federal Tax Ombudsman Dr Muhammad Shoaib Suddle has underlined the need for punishing tax evaders, saying “harsh punishments are required with strict monitoring”.
Addressing businessmen at the Karachi Chamber of Commerce and Industry (KCCI) on Thursday, he said the economy is facing serious challenges in the wake of shrinking tax-to-gross domestic product (GDP) ratio.
“Our expenditures are growing but tax collection is declining. We need to respect taxpayers,” he said, but at the same time added all chambers should condemn tax evasion for ensuring a bright future for Pakistan.
In 1988, he recalled, the tax-to-GDP ratio in Pakistan was 13.8 per cent but today after 22 years, it has reduced to 8.9 per cent. As a result of this low ratio, the country is losing Rs800 billion per annum in tax revenues. “We would have been in a good condition even if we had stayed at 13.8 per cent ratio,” he stressed.
Underling the need of controlling smuggling under the Afghan Transit Trade, he said investigations have revealed that many containers were imported into Pakistan on fake documents in the name of International Security Assistance Force (ISAF) in Afghanistan. However, he quickly added that no proof has been found that substantiate the involvement of ISAF forces in any such cases.
He also said that various measures need to be taken like tracking the containers through GPRS system and putting bar codes to detect containers. “We want the Federal Board of Revenue (FBR) to take on the challenges since its role is critical in improving the system to detect tax evaders,” he replied when asked about strengthening the tax system.
Suddle said that his office has improved its working a lot in dealing with the problems of complainants, which is evident from the fact that 87 per cent cases that were registered with the ombudsman in 2010 has been solved.
He said that during 2004 to 2008, the average time in solving the cases was 117 days, but it was brought down to 66 days during 2008-2009. “Our department is working on an online system where our complainants can monitor their cases and check developments,” he added. Citing an example, he said the role of ombudsman in Malaysia is very effective, where the ombudsman listens to complaints at a specific place and then solves all the cases on the same day.
“If Malaysia can implement and run this system, I am convinced that this type of system is very much doable in Pakistan and therefore, we are striving to bring such system,” he said.
Published in The Express Tribune, January 21st, 2011.
Federal Tax Ombudsman Dr Muhammad Shoaib Suddle has underlined the need for punishing tax evaders, saying “harsh punishments are required with strict monitoring”.
Addressing businessmen at the Karachi Chamber of Commerce and Industry (KCCI) on Thursday, he said the economy is facing serious challenges in the wake of shrinking tax-to-gross domestic product (GDP) ratio.
“Our expenditures are growing but tax collection is declining. We need to respect taxpayers,” he said, but at the same time added all chambers should condemn tax evasion for ensuring a bright future for Pakistan.
In 1988, he recalled, the tax-to-GDP ratio in Pakistan was 13.8 per cent but today after 22 years, it has reduced to 8.9 per cent. As a result of this low ratio, the country is losing Rs800 billion per annum in tax revenues. “We would have been in a good condition even if we had stayed at 13.8 per cent ratio,” he stressed.
Underling the need of controlling smuggling under the Afghan Transit Trade, he said investigations have revealed that many containers were imported into Pakistan on fake documents in the name of International Security Assistance Force (ISAF) in Afghanistan. However, he quickly added that no proof has been found that substantiate the involvement of ISAF forces in any such cases.
He also said that various measures need to be taken like tracking the containers through GPRS system and putting bar codes to detect containers. “We want the Federal Board of Revenue (FBR) to take on the challenges since its role is critical in improving the system to detect tax evaders,” he replied when asked about strengthening the tax system.
Suddle said that his office has improved its working a lot in dealing with the problems of complainants, which is evident from the fact that 87 per cent cases that were registered with the ombudsman in 2010 has been solved.
He said that during 2004 to 2008, the average time in solving the cases was 117 days, but it was brought down to 66 days during 2008-2009. “Our department is working on an online system where our complainants can monitor their cases and check developments,” he added. Citing an example, he said the role of ombudsman in Malaysia is very effective, where the ombudsman listens to complaints at a specific place and then solves all the cases on the same day.
“If Malaysia can implement and run this system, I am convinced that this type of system is very much doable in Pakistan and therefore, we are striving to bring such system,” he said.
Published in The Express Tribune, January 21st, 2011.