Federal Board of Revenue (FBR) Chairman Shabbar Zaidi has informed Prime Minister Imran Khan that serious flaws in the taxation policy have resulted in substantial accumulation of untaxed wealth. In this regard, the FBR has communicated points to the Prime Minister. When contacted, FBR Chairman Shabbar Zaidi clarified to Business Recorder that he has not written any formal letter to the Prime Minister. However, points/notes based on facts have been communicated to the PM, he added.
Following are the FBR points shared with the PM:
1. Pakistan tax collection system generates less than 10% of GDP. 2. Due to serious flaws in policy substantial accumulation of untaxed wealth. 3. Large number of businesses is reluctant to enter into tax system. 4. One percent of the people are carrying the burden of whole state. 5. Current system is not workable and a serious threat to country''s economy. 6. Industrial electricity collection is 341,000, whereas only 40,000 sales tax registrants.
7. Out of 100,000 companies registered only 50 percent file returns.
8. More than 3.1 million commercial collections whereas 90% of such persons fall outside the tax system; 300 companies in Pakistan pay more than 85% of tax.
9. Over 75% of tax is collected from manufacturing sector that seriously affects the manufacturing and industrial sector.