The World Bank has stated that Pakistan is not collecting as much tax as it could. According to their report, Pakistan is falling short by Rs737 billion in tax collection, and they recommend that the government should remove all tax exemptions to reduce the burden of debt.
The World Bank suggests that Pakistan should increase its tax revenues from agriculture, properties, and retail businesses to generate more income. They point out that two significant areas, real estate and agriculture, have a lot of untaxed wealth, and provincial governments should impose taxes on them.
In the case of the real estate sector, the report mentions that it is paying Rs402 billion less in taxes than it could.
The World Bank also recommends that Pakistan should simplify its income tax system, making it fair for both salaried and non-salaried individuals, with a focus on fairness and progressivity.
Furthermore, the World Bank suggests increasing the Federal Excise Duty on cigarettes, which could lead to the collection of up to Rs268 billion in taxes from this sector.
Previously, the World Bank advised the government to cut various subsidies to save money, highlighting that Rs167 billion could be saved by reducing the Tariff Differential Subsidy (TDS).
