World Bank has highlighted that Pakistan is currently collecting less taxrevenue than it has the potential to collect. The report indicates thatPakistan falls short of collecting Rs737 billion in taxes.
The World Bank recommends that Islamabad eliminate all tax exemptions toalleviate the burden of debt. Additionally, the World Bank suggestsincreasing tax revenues from sectors such as agriculture, real estate, andretail businesses to generate additional income.
The report emphasizes that the provincial governments should focus ontaxing previously untaxed wealth in areas like real estate and agriculture.In particular, it notes that the real estate sector in Pakistan iscontributing Rs402 billion less in taxes than it could.
Furthermore, the World Bank recommends simplifying the income taxstructure, making it consistent for both salaried and non-salariedindividuals while ensuring a progressive tax system. Lastly, the banksuggests raising the Federal Excise Duty on cigarettes to generate up toRs268 billion in tax revenue from this sector.
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Additionally, it advises reducing various subsidies, with the potential tosave 167 billion rupees from the Tariff Differential Subsidy (TDS).