Shamshad plans tax system revamp to boost collection

Finance Minister Shamshad Akhtar has directed the Federal Board of Revenue (FBR) to prepare a proposal for revamping the tax system and increasing the tax-to-GDP ratio, which has remained stagnant for years, Dawn has learnt from official sources. The FBR officials, however, have expressed reservations about the feasibility and impact of the proposed restructuring plan and have suggested that policy reforms are more effective in achieving the revenue goals. According to Dr Akhtar, the tax-GDP ratio in Pakistan has been stuck at around 9pc for decades, which is much lower than that of India. India has a tax-to-GDP ratio of 17pc, with 11pc coming from the central government and 6pc from the states. The government has projected a revenue collection target of Rs9.415tr for FY24 as against the revised collection of Rs7.2tr in FY23, showing an increase of Rs2.219tr or 30pc.