Islamabad: The Federal government reassured the International Monetary Fund (IMF) that a semi-independent tax authority would be set up in the country for the ease of bringing income sources under administrative tax reforms, as per news reports. They have also committed to not providing any further tax exemptions on Monday.
The new tax policy aims to raise the overall tax revenue by maintaining a low rate of taxation but increasing the number of people who pay those taxes. The plan is to simplify the process of tax collection. This will be done by coordinating the collection of the general sales tax (GST) on a provincial level while simultaneously removing all GST exemptions and preferential rates, apart from those on basic foods and medication. Overtime, this is will strengthen the tax collection method and turn it into a fairer system based on equal taxation for all income sources.
Reforms in tax administration are, therefore, necessary to enable proper functionality of such a broad system to be run smoothly and fairly. All these efforts are being made to increase the percentage of tax revenue in the GDP, which is currently lower than 13 percent.
Additionally, the government is going to be increasing the penalty for non-compliance of tax, implementing a risk-based audit framework and allotting licenses for the track-and-trace system for excise on cigarettes. The entire system is expected to be implemented by the end of March of next year.
Samra Zulfiqar, a real estate analyst at Zameen.com, is passionate about finding projects that offer buyers the best returns. Her keen insights spotlight the market’s most promising opportunities.
