Taxation System of Pakistan

Pakistan’s Current Taxation system is defined by Income Tax Ordinance 2001, promulgated on 13 September 2001, which became effective from 1 July 2002. Taxes are required to meet the expenditure and spending that a country needs to give out its people. Pakistan operates through hybrid system, Federal Board of Revenue (FBR) collects taxes on goods and the provinces impose on services.

Main Concern of Pakistan’s Tax Policy

Government collect taxes from its people in order to spend the collection on the welfare and well-being of its people which includes debt servicing, national defense and other welfare related issues. Our current tax collection system has many flaws which comprises of loopholes in the system that go along with the corruption of Federal Board of Revenue (FBR) officers which speaks about the justice and fairness of our government officials for their people. There favors to their delighted people are the major root cause of the corruption that weaken the taxation system of the country.
The current tax-to-GDP ratio in Pakistan is 12%, which is lowest in the SAARC countries as compare to other countries. If we compare this ratio with any of the developed countries, we are far below in numbers. The tax-to-GDP ratio in other continents like Australia is 25.8%, in America 26.9% and all European countries around 37-39%. The world bank report shows Pakistan GDP graph of last 8 years.

For more blogs, click here.

Comments

Post a Comment

Popular posts from this blog

Is CNIC and NTN number are same?

Image
No, the CNIC and NTN numbers are two different numbers. The CNIC is a 13-digit number that consists of the first three parts of a five-part section that gives different demographic information and the second part is his family number and the last part represents your gender group. But the NTN number is completely different this number has two digits and is 8 digits. The NTN number is generated sequentially. CNIC and NTN have been different numbers but the FBR has announced that from the 2018-18 financial year they will both be equal. The announcement to include in the CNIC as NTN figures in effect from the last fiscal year 2018 - 19, the Federal Board of Revenue (FBR) are all set to use the details of companies to extend the tax base, it is read. The Federal Board of Revenue has said NADRA has issued CNIC numbers to NTN (National Tax Number) for all Pakistanis and anyone who submits tax forms can use their CNIC instead of NTN issued by Fbr. Please check blogs for more informatio...
Read more

What is the penalty for concealment of income?

Image
Where, in the course of any proceedings under this Ordinance, the Commissioner, Commissioner (Appeals), or the Appellate Tribunal is satisfied that any person has either in the said proceedings or in any earlier proceedings relating to an assessment in respect of the same tax year concealed income or furnished inaccurate particulars of such income, the Commissioner, Commissioner (Appeals), or the Appellate Tribunal, as the case may be, may, by an order in writing, impose upon the person a penalty equal to the amount of tax which the person sought to evade by concealment of income or the furnishing of inaccurate particulars of such income. For the purposes of subsection (1), concealment of income or the furnishing of inaccurate particulars of income shall include – the suppression of any income or amount chargeable to tax; the claiming of any deduction for any expenditure not actually incurred; or any act referred to in sub-section (1) of section 111. Where any ...
Read more

Custom Basics

Image
Prior to the registration and execution of various custom processes, it is recommended that people familiarize themselves with all the basic concepts related to these processes. A basic understanding of these concepts would not only ensure that tasks are performed easily but also in a limited way. Functions of Pakistan Customs : Pakistan Customs must ensure that the following works are done in a lawful manner. Import & Export of legitimate cargo Trade Facilitation Trade Regulator Preventive (Control of contraband Goods) Revenue Collection Basic terminology ACCOUNT: Account means all the records, books, correspondence, bank and financial statements ACT: It means Pakistan’s customs ACT. 1969 (IV of 1969) COLLECTOR: It means “Collector”, “Additional Collector”, “Deputy Collector” and “Assistant Collector”, respectively, means the Customer Collector, Additional Customer Collector, Customs Collector and Customs Collector appointed un...
Read more