After IMF, World Bank starts pressuring Pakistan government
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The World Bank has expressed concerns about Pakistan's inadequate tax collection, highlighting that the country's tax-to-GDP ratio is only 11.6% while it should ideally be at least 15% for progressive nations.
Despite various reform attempts, tax collection in Pakistan remains the lowest in the region, according to the World Bank report. To address this issue, the World Bank recommends increasing tax collection from key sectors and eliminating exemptions on income tax, sales tax, and customs duties.
They also suggest linking property tax rates to market values by connecting land ownership records with national identity cards and national tax numbers. Additionally, the World Bank proposes implementing a standard GST (General Sales Tax) rate of 18% on various goods and bringing individuals earning less than 600,000 rupees annually into the tax net.
Furthermore, the report advises imposing additional taxes on agriculture, property, real estate, retail, and the cigarette sector while reducing taxes on luxury items.
The World Bank underscores that Pakistan's financial stability hinges on implementing revenue reforms and addressing the complexity of the corporate income tax system, which currently allows many companies to benefit from preferential tax schemes.
