ISLAMABAD: Pakistan’s Finance Minister Muhammad Aurangzeb revealed alarming figures regarding tax evasion in the country.
During a press conference in Islamabad on Thursday, he stated that the annual tax theft amounts to nearly Rs 7,000 billion and emphasized the government’s commitment to broadening the tax base and reforming the tax system.
Aurangzeb declared a “war against tax evaders,” highlighting that the burden of taxes predominantly falls on the salaried class. He outlined the goal of raising the tax-to-GDP ratio to over 13% and establishing a fair tax regime where every sector contributes to the nation’s economic development.
Additionally, a spokesperson for the Federal Board of Revenue (FBR) announced plans to bring around 2.8 million potential households into the tax net, which could generate approximately Rs1.6 trillion for the economy. The FBR noted that while there are about 3.5 million high-income households liable for taxes, 2.8 million of them are currently non-compliant.
The government is implementing a comprehensive strategy to enhance the tax-to-GDP ratio, which is expected to result in an increase in both the number of tax filers and tax collection for the fiscal year 2024-25.
Earlier today, at the Pakistan-Saudi Arabia Business Forum, Aurangzeb emphasized that the government’s role is to facilitate rather than engage in business, welcoming Saudi Arabian delegates to promote trade and investment through a Business-to-Business (B2B) model.
He noted significant advancements in macroeconomic stability over the past 12 to 14 months, mentioning that Pakistan has achieved a primary surplus, reduced its current account deficit to below $1 billion, stabilized its currency, and increased foreign exchange reserves to cover two months’ worth of imports. Aurangzeb also highlighted strong remittances, export growth, and a drop in inflation from 38% to 6.9%, along with the positive effects of a reduction in the policy rate on businesses.
