KARACHI: Pakistan Tax Bar Association (PTBA) has emphasised the need for the digitalisation and documentation of the economy and the tax system to achieve a sustainable and tax-responsible Pakistan.
In its budget proposals for the fiscal year 2024-25 submitted to the Finance Minister, PTBA emphasised the need to broaden the tax base by imposing taxes on all incomes and implementing uniformity in salaried taxation. The proposals also suggested taxing pensions at a fixed rate of 10% for monthly pensions exceeding Rs. 100,000.
Highlighting the importance of documentation, PTBA proposed implementing Point of Sale (POS) systems at the service provider level and abolishing Section 7E of the Income Tax Ordinance, 2001, as well as, the capital value tax on foreign assets.
On the indirect taxes front, the proposals recommended implementing POS at every level of trading activity and reducing the sales tax rate to a single digit (6%) across all levels. Additionally, PTBA advocated for a reduced sales tax rate for online banking or card payments to encourage digital transactions.
To address the challenges faced in establishing an efficient tax system, such as the compliance tax gap, lack of documentation, legal loopholes, cash-based economic activity, and disjointed tax administration, PTBA proposed leveraging artificial intelligence (AI) and implementing digital solutions at the Federal Board of Revenue (FBR) and operational levels to enhance transparency and efficiency in tax collection.
Copyright Business Recorder, 2024
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