Overhauling Pakistan’s tax system

I A Mayburov (2007) defines the Tax System as ‘a system that is a principle-based integral unity of its main interconnected and interrelated elements. These elements are the regulatory legal basis of taxation, the set of taxes and fees, the payers of taxes and fees, and the mechanism of tax administration’. Considering these elements in relation to Pakistan’s tax system reveals the need for comprehensive overhaul. The budgeted revenue receipts for the fiscal year 2023-24 are Rs12.378 trillion, with tax revenue receipts budgeted at Rs9.415 trillion, constituting 76% of the total revenue receipts. Projections for fiscal years 2024-25 and 2025-26 anticipate increases in tax revenue, reflecting a strategy for growth. The challenge remains on achieving these targets, whether through traditional methods of taxing existing taxpayers or through a fundamental overhaul of the tax system. Success lies in the latter, with a focus on modernisation and efficiency.