Steps taken to raise tax-to-GDP ratio: Provinces, FBR told to provide details

RECORDER REPORT

ISLAMABAD: The Finance Division has asked the Federal Board of Revenue (FBR) and provinces to give details of measures being taken to raise tax-to-GDP ratio to 15 percent by 2014-2015 under the National Finance Commission’s (NFC) 2010 recommendation.

Sources told Business Recorder here on Friday that this would be discussed in the upcoming meeting of provincial Finance Secretaries, FBR and Finance Division.

The 2010 NFC Award recommended that “the federal government and provincial governments should streamline their tax collection systems to reduce leakages and increase their revenues though efforts to improve taxation in order to achieve a 15 percent tax-to-GDP ratio by 2014-15.

Provinces would initiate steps to effectively tax agriculture and real estate sectors. “The federal government and provincial government may take necessary administrative and legislative steps accordingly,” it said.

FBR and Provincial Finance Secretaries would update the Finance Division on the efforts being taken to meet this target. Provinces would also highlight their efforts to raise tax revenues at provincial level, sources added.

The FBR envisages an increase in tax:GDP ratio from existing 9.1 percent to over 10 percent in 2012-2013 by taking administrative measures of Rs176.1 billion including an amnesty scheme that legalizes un-disclosed assets.