Govt urged to reduce tax gap to improve revenue

Islamabad: Ahmed Hassan Moughal, President, Rafat Farid Senior Vice President and Iftikhar Anwar Sethi Vice President, Islamabad Chamber of Commerce & Industry have called upon the government to take strong measures for reducing tax gap in order to realise the actual tax potential of Pakistan and improve its tax revenue.They said that Pakistan has substantial potential to enhance tax revenue without imposing new taxes or increase tax rates, but the only requirement was to take steps to reduce tax gap and create a conducive environment for tax compliance.They said that a recent World Bank document titled “Pakistan Revenue Mobilization Project” has pointed out a 50 per cent gap between actual and potential tax receipts in Pakistan while Pakistan’s tax revenue potential would reach 26 per cent of GDP if tax compliance was to be raised to 75 per cent, which was a realistic level of compliance for developing countries like Pakistan.They said that Pakistan’s revenue performance has improved significantly rising from 9.5 per cent of GDP in 2011-13 to 13 per cent in 2017-18, which was appreciable. However, they said that Pakistan could make substantial increase in tax revenue by promoting a tax compliance culture and reducing tax gap. Ahmed Hassan Moughal said that Prime Minister had nominated Shabbar Zaidi, a chartered accountant and a tax expert from private sector for Chairmanship of FBR.He said it was a good move to make FBR more dynamic and proactive tax collection agency. However, the federal cabinet has reportedly not approved his appointment as yet, which has created more confusion. He stressed that government should settle this issue.

from The News International - National http://bit.ly/2PRcRUT