ISLAMABAD – Finance Minister Muhammad Aurangzeb said on Thursday that expanding the tax base is crucial for the country’s economic growth.
The finance minister explained the decision to eliminate the term “non-filer,” a concept unique to Pakistan that he found confusing. He pointed out that the tax rate for those not paying taxes was increased to compel them to contribute to income tax.
He expressed these words while addressing post-budget press conference in Islamabad on Thursday. Another Minister Ali Pervaiz Malik was also present there.
The journalists staged a protest as a toke against the increased income tax on the salaried class.
Finance Minister Aurangzeb said that the income tax exemption for individuals earning up to Rs600,000 annually remains unchanged. The maximum tax rate for the salaried class is 35 percent while professionals in the non-salaried class face a 45 percent tax rate.
He stated that the goal of the government authorities is to raise the tax-to-GDP ratio to 13 percent, noting that the current ratio below 10 percent is unsustainable. The said target is likely to be achieved within three to four years.
Aurangzeb while explaining the increase in the taxes mentioned the government’s plan to include retailers and wholesalers in the tax net, aiming to distribute the tax burden more evenly across the salaried class.
He highlighted efforts to digitize the undocumented economy by reducing human intervention to help combat corruption.
He commended the Federal Board of Revenue (FBR) for successfully bringing more retailers and wholesalers into the tax system.
Since April, around 31,000 retailers were voluntarily registered with the FBR following a request from the authorities, he added.
