Pakistan third highest country subject to taxes


Amanullah Khan

Karachi—The President of Federation of Pakistan Chambers of Commerce & Industry (FPCCI) Abdul Rauf Alam disclosed that Pakistan is the third highest country in the world in Corporate Taxes. He said that about 52 types of local, provincial and Federal level taxes are being paid by the corporate sector which is in fact a major reason of deteriorating the ease of doing business. He further stated that Tax-to-GDP ratio is lower even though the rate of taxes in the country are very much higher which shows the unequal burden of taxes.
He further stated that last year the World Bank in its report mentioned that Pakistan has a disturbingly high tax rate for businesses. The tax rate is stated as unusually high for a nation from a developing country. He said that small number of tax payers is always put in pressure of higher rate of taxes due to narrow based tax net. While comparing the ratio of corporate taxes in 2015 with other countries he stated that in Pakistan it is 33% whereas in Bangladesh is 27% , Sri Lanka 28%, Malaysia 25% and the average corporate taxes in Asia is 23% where the global average is 24%. The situation is similar in indirect taxes and GST. Rauf Alam said that FPCCI has been emphasizing on higher share of direct taxes and shifting from indirect taxes to provide relief to a common man.
He further said that the system of taxation in Pakistan is regressive in its nature as it shifts the burden of taxes to the lower income group. The FPCCI’s instance is clear that who earns more should pay more taxes regardless the source of earnings, he added. Pakistan has become an attractive land for foreign investments but he expressed his concern over higher rate of corporate taxes and said that it may discourage the investment due to lesser return over investment in coming days. He urged the government to rationalize the corporate taxes within the global average rate.