Falling revenue receipts

AFTER witnessing fall in exports and remittances, the government is now faced with another quandary of plummeting net revenue receipts. It has been reported that the country’s net revenue receipts failed to meet requirements of even debt servicing during the first quarter of the current financial year- an alarming development that should ring alarm bells in the relevant quarters entrusted with the responsibility of tax collection.
Due to different factors including the launch of multi billion dollars CPEC project, the country’s economy is witnessing an upward trajectory but some of the basic fiscal issues including increasing tax to GDP ratio still remain a challenge for the government. Successive governments including the present one boasted of taking steps towards this end but the situation on the ground has not changed much as the rich and influential continue to evade taxes and the result is that the poor are overburdened through the imposition of indirect taxes in every budget. The dismal state of affairs could be gauged from the fact that out of two hundred million population, only about 0.5 million pay taxes which is one of the lowest ratios in the world. Given the drastic fall in revenue receipts, time has come that the present government take some drastic and tough decisions to enhance the tax ratio. We understand our financial team also has the capability to do so and it has also become imperative if we really want to free our country from the clutches of foreign and domestic borrowings to meet our expenditures. There is need that all sectors of the economy are brought into the tax-net without any exemption. First and foremost, the government should tax its elite constituents via a direct tax regime and relief should be given to the poorest segments of the society by reducing the ratio of indirect taxes. Going after the non-taxpaying elites is a pre-requisite to be able to successfully roll out wider reforms of the taxation structure. Apart from the government, responsibility also rests with us that we pay our taxes honestly in order to ensure a brighter future for our coming generations. We will also request the FBR to simplify the online tax forms in order to encourage the common men file their returns.

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