Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on Wednesday said that despite the government’s best efforts, the direct tax compliance is not satisfactory, which is imperative for the national development.
FBR has been given more powers, but it has not deterred tax evaders, which should be a cause of concern.
Mian Zahid Hussain said that the government had tried its best to expand the tax base and improve the collection. Still, out of 7.2 million registered taxpayers, only 2.5 million have submitted their returns for the year 2021.
Talking to the business community, the veteran business leader said that the taxpayers’ attitude had kept the direct income tax level at 35 percent of the total collection.
He noted that fines, arrest, jail, unilateral deduction from bank accounts, and powers to disconnect electricity and phone connections of non-filers has not improved.
He said that the tax-to-GDP ratio in Pakistan is a mere 10 percent, and many governments have tried to boost it to 15 percent but never succeeded, keeping the country backward and dependent on loans.
Mian Zahid Hussain further said that reduction in debt burden, cut in deficit, industrial development and improvement in social and economic indicators, including the provision of jobs, is linked to improved direct tax collection.
Reduced tax collection can compromise the integrity of a country. Therefore, tax administration should be strengthened. Direct taxation should be improved as indirect taxes hit the middle and poor class, forcing them to compromise health and education, which is very dangerous for the country.
He said that not a single country in the world had attained development through indirect taxation.