Cost of inefficiency: ‘Pakistan could collect Rs5t in taxes’

Tax ombudsman says system flaws allow collection of only a fraction.

Shezad Baloch July 27, 2011


Pakistan could collect an estimated Rs5 trillion in taxes every year but due to flaws in the collection system, the Federal Board of Revenue (FBR) is able to collect Rs1.5 to 1.6 trillion, said Federal Tax Ombudsman Dr Shoaib Suddle while addressing income tax officers and FBR officials here on Tuesday.

The ombudsman admitted that officials were not taking action against influential tax evaders but said efforts are underway to collect taxes from them.

“I do not hesitate to say that the system is not fair but efforts are being made to overcome the flaws and weaknesses,” he said.

‘Missing’ containers

While commenting over the container scam, Suddle said that the FBR worked on the case for over three months and produced a comprehensive report.

Earlier, an inquiry committee of the Federal Board of Revenue revealed that the
national exchequer lost as much as Rs50 billion in unpaid duties, tax evasion and pilferage in Afghan transit trade goods.

The panel, formed under Supreme Court’s directives, found that traders and revenue officials colluded in making 23,882 commercial containers “vanish” from Karachi port and avoided paying as much as Rs50 billion in duties and taxes.

“The number of missing containers is still rising,” Suddle said.

“While our prime duty is to collect revenue and maintain law and order, [the missing containers] is a serious issue because they could contain military equipment for coalition forces which can be used to destabilise the country,” he added.

Suddle said that there should not be transit trade because it reflects weakness in the system and that the country needs immediate reforms in this regard.

He said he was receiving complaints from taxpayers against some officials and said they would be held accountable if found guilty.

Published in The Express Tribune, July 27th,  2011.


zabdesk | 10 years ago | Reply

I agree with the above. The figures appearing in the article are imaginary figures when compare with real collection. Further I dont think there is any flaw in the collection system but I think there is no collection system with the FBRs bosses. They just see their personal accounts statements and remain happy. Look at the life style enjoyed by the tax collectors in Pakistan.

H.A. Khan | 10 years ago | Reply

Please get the tax payers profile from FBR of tax payers.

My guess is 100 companies pay over 75% of the direct tax.

FBR should make public Tax payers profile based in Income/tax paid slabs.

Also FBR should share with public,the cost of running FBR units and salaries of staff

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