Published Date: Jun 3, 2014
Media briefing on tax directory held
Documented economy or registered businesses is contributing significantly in national revenues despite the tax rate for them is as high as 34%, said Sustainable Development Policy Institute Executive Director Dr Abid Qaiyum Suleri.
Dr Suleri was speaking at a media briefing on tax directory here at SDPI.
He said that a balanced strategy based upon suitable tax bracket is required to bring all economic classes under the tax net.
Elaborating an SDPI analysis, Dr. Suleri said that according to FBR tax directory, out of total direct taxes of Rs739 billion, collected in Fiscal Year 2012-13, Rs344.67 billion which constitutes 47% of the total income tax was deducted at-source as this tax was paid by the registered business enterprises. He said that FBR collected Rs395.01 billion (53%) from individuals or non-registered entities.
He said that the big fish enjoying luxurious life fail to
contribute their due share of the tax to the national economy. Similarly, agricultural sector should also be into the tax net to make it a flat system of tax payments.
He observed that the analysis also gave shocking results about tax compliance ratio of registered business entities. According to the available data, by June 30, 2013, a total 61,989 companies were registered with the Securities and Exchange Commission of Pakistan (SECP) whereas only 23,845 or 38% registered companies filed tax returns with the FBR. Out of these, 10,639 or 17% companies filed zero tax and only 21% companies paid amount in their tax returns.
However, the tax contribution of these 21% registered companies was Rs315.85 billion or 43% of total direct tax collection for the year under study.
In the question hour, Dr Suleri asked the government to release a directory for the non-tax payers as well. He opined that every citizen should be made to file tax return, and it should be made mandatory to release the financial statements for every citizen.
Dr Suleri observed that the civic education is required for every citizen and that is where the media can play its effective role through spreading awareness and educating the masses over the benefits of paying taxes towards contributing to the national economy.