The World Bank has put forth major demands for tax reforms from the Pakistani government and eliminating the exemptions on duties and sales tax, VOS News reported on Thursday.
The World Bank released its report on Pakistan and suggested the government of the urgent need for tax system reforms and the elimination of sales tax exemptions to promote economic and social improvement.
The report calls upon the government of Pakistan to establish a national policy for the child development and advocates for reducing subsidies on energy and other commodities, while suggested to reallocate these funds towards public welfare initiatives.
“Government should implement austerity measures and promote public-private partnership in govt owned companies,” the report suggested.
The report of World Bank suggested the Pakistani government to restructure the tax system and abolish the exemptions of duty and sales tax and hinted to impose new taxes on real estate and agriculture industry.
Apart from this, it is also suggested to formulate a long-term commercial tariff strategy and align the gas tariff for consumers with the cost of supply.
Last year, the World Bank revealed that Pakistan is collecting lesser tax than its actual capacity.
Pakistan is falling short of Rs737 billion in tax collection, the World Bank said in its report and urged Islamabad to close all tax exemptions to release the burden of debts.
The WB has suggested Pakistan to increase tax incomes from agriculture, properties and retail businesses to generate additional revenue. Two major areas in the provincial jurisdiction — real estate and agriculture — had most of the untaxed wealth, which should be taxed by the provincial governments, the international lender said.
