Pakistan Observer
Published Date: Dec 24, 2013
Dialogue for taxation reforms stressed
There is a need for dialogue on taxation reforms in Pakistan, given the country’s weak
fiscal position. This was expressed by Dr. Abid Suleri, Executive Director, Sustainable Development Policy Institute (SDPI) at the launch of a
report titled ‘Taxation by Misrepresentation’ here today.
The report tracks tax declarations and returns filed with the Election Commission of Pakistan (ECP) and Federal
Bureau of Revenue (FBR) respectively by legislators across the country (national and provincial
assemblies). Speakers at the
occasion also stressed that the Government
should release a tax directory comprising of tax record of all elected
legislators, in accordance with the law.
The research report has been undertaken by the Sustainable Development Policy
Institute (SDPI), in partnership with the Center for Investigative Reporting in
Pakistan (CIRP). According to the report, 123 legislators and a provincial
financial minister do not even have an NTN number. A total of 461 legislators
are classified as ‘non tax-paying’, while those claiming to pay their taxes are
numbered at 550 according to the report. There is no tax record to be found for
54 elected candidates.
From the National Assembly of Pakistan, 125 members are classified as
‘non-taxpaying’, including two ministers.
In the Provincial Assembly of Punjab, there are 161 such members, including two
ministers; in Sindh, there are 59 such MPAs, including a serving minister; 80
non-taxpaying MPAs in Khyber Pakhtunkhwa Assembly, including four ministers,
speaker and the deputy speaker; 36 non-taxpaying MPAs in Baluchistan assembly,
including eight ministers. Overall, 47% of legislators from all the assemblies
in Pakistan have not filed their taxes, according to the record of FBR. The
highest percentage of non-taxpaying legislators was found in the assembly of
Khyber Pakhtunkhwa.
The report also highlights that there are large discrepancies in tax record as
well as income declaration of elected legislators in all the national and
provincial assemblies. According to the report “Tax declarations of several top
leaders have been found at variance with FBR data”. Discrepancy between income
and tax declaration and records of the FBR was found for 26% of legislators
from the National Assembly of Pakistan. Significant discrepancies between
declarations of income and tax and FBR record were also found for Chief
Ministers of Balochistan, KPK and Punjab.
Participants at the occasion also highlighted the need for change in legislation to ensure tax diligence.
Pakistan’s consistently dismal economic performance has exacerbated the need
for taxation reforms in the country. With an abysmally low tax-to-GDP at around
9%, Pakistan ranks lower than most comparator economies, including India, Sri Lanka, Indonesia and Malaysia.
While indirect taxation has increased the burden on the poor of the country, the privileged ones not only continue
to enjoy tax exemptions and amnesty schemes, but also evade applicable taxes on
their incomes.