The finance minister of Pakistan, Shamshad Akhtar, has asked the FBR (Federal Board of Revenue) to come up with a plan to overhaul the tax system and raise the tax-to-GDP ratio, which has not changed much for years, according to official sources who spoke to Dawn.
However, the FBR officials are doubtful about the practicality and outcome of the proposed restructuring plan and have recommended that policy reforms are more effective in achieving the revenue goals.
Dr Akhtar said that Pakistan’s tax-GDP ratio has been 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 set a revenue collection target of Rs9.415tr for FY24 as compared to the revised collection of Rs7.2tr in FY23, showing an increase of Rs2.219tr or 30pc.