Developing tax culture vital for Pakistan’s sustainability: PM Imran

Prime Minister Imran Khan said on Tuesday that developing a tax culture was vital for Pakistan’s sustainability as the country could not be run on foreign loans.

“It is essential for Pakistan to develop a tax culture because the country’s sustainability is at stake. We cannot continue like this.

"Our biggest problem is that we don't have enough financial resources to run our country due to which we borrow loans,” he said while addressing the inaugural ceremony of the Track and Trace System (TTS) of the Federal Board of Revenue (FBR) for the sugar industry in Islamabad.

The Track and Trace system will ensure electronic monitoring of manufacturing and sales of products of important sectors consisting of tobacco, fertilisers, sugar, and cement.

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The scope of electronic monitoring ranges from manufacturing of the products to their usage by the end-users, bringing much-needed revenue for the country and preventing tax evasion in these sectors.

After rolling out electronic monitoring of the tobacco sector, the FBR is now implementing the Track and Trace System in the sugar sector, which will be followed by the remaining sectors.

In this regard, FBR has already issued Sales Tax General Order No-5 vide powers conferred under Section 40C (2) of the Sales Tax Act-1990 and Rule 150 ZF of the Sales Tax Rules-2006.

The Track and Trace System and many other similar initiatives and interventions are meant to increase revenues, promote transparency and thereby maximise tax compliance in Pakistan.

In the next phase, the FBR is planning to cover the beverages and petroleum sector in the Track and Trace System.

Khan has consistently pushed the FBR to launch the system to curb tax evasion and document the country’s economy.

In his address, the premier stressed that tax collection had become a matter of national security because the government did not have enough resources to spend on people’s welfare.

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Khan said that the FBR had a major role in this regard as the country’s survival now depended on enhancing tax collection.

“The biggest issue my government has faced is that when we took over, the country was on the verge of bankruptcy. We did not have enough money to run the country, due to which we had to take loans,” he said.

The premier lamented that his government did not have enough money to manage its finances effectively as previous rulers did not promote tax culture.

“Ruling elite never allowed the tax culture to develop in Pakistan,” Khan said, adding there is a trust deficit between common people and the government.

“The masses believe that the ruling elite doesn’t care about them. When people believe that the tax money will be utilised for their own benefits, they will start paying taxes.”

He noted that people are happy to give charity but do not pay taxes.

“I am convinced that as we assure people that we are investing their money on them, it will become easier to gather taxes. Once we say that our children and youth’s happiness is linked with the tax collection, this nation will pay taxes,” he emphasised.

“When we look at resources left after debt servicing, they not simply not enough," he said.

"We are stuck in a vicious cycle. It can only break if we increase our tax collection and that can only happen if we adopt technology,” he added.

The premier said that the FBR should make efforts to restore people's confidence in the system, adding once people are convinced that their taxes will be spent on their welfare, revenues will increase.