KARACHI – Taxpayers in Pakistan face plethora of technical issues and errors while filing income tax returns every year via the IRIS system, and it even led to delays, and even forced many to avoid coming into the tax net, but the whole system is going to be revamped under current setup in Pakistan.
As people face issues related to miscalculations, data not transferring correctly, and brunt on salaried individuals, Finance Minister Muhammad Aurangzeb acknowledged the disproportionately high tax burden on Pakistan’s salaried class and suggested that a review of the current tax slabs may be in the works.
His statement is a sigh of relief, showing the government’s awareness of challenges faced by the salaried class and its intention to address these concerns in future tax reforms.
The country’s finance czar admitted that the salaried group faces an unfairly high tax burden, which he termed a ‘disproportionately high burden.’ Aurangezeb, who holds decades of experience in banking, said a reassessment of the existing tax brackets could be a possibility amid the current setup.
He assured that the government aims to simplify tax filing process for salaried individuals, making it easier for them to meet their tax obligations. The finance chief vowed to make life simpler for salaried class by easing tax compliance process for this group.
As coalition government reiterated stance to follow fiscal responsibilities, the finance minister highlighted that any changes to tax policies might need to be phased in over time to ensure they align with international commitments.
Salaried class in Pakistan become largest contributor to income tax, with their payments rising by over 300pc in first half of current fiscal year compared to those doing buisness. Rs243 billion was collected from salaried individuals due to higher tax rates for high-income earners under the IMF program.
On the other hand, exporters paid Rs80 billion, almost double as compared to last year, after their tax rate increased. Retailers also contributed through new tax provisions for non-filers. Despite massive increases, apex tax collection authority FBR faced Rs384 billion shortfall and is struggling to meet revenue targets, partly due to the underperformance of the Tajir Dost Scheme for retailers.
