Finance Minister Miftah Ismail claimed on Friday that the country’s tax evasion totals Rs. 3,000 billion per year. This claim was made during the presentation of the budget for 2022-23 in parliament.
According to the finance minister, a comprehensive program is being launched to combat tax evasion.
According to the finance minister, “Rs. 3000 billion in tax is stolen annually, and a very comprehensive program is being launched to combat this evasion.”
He also expressed hope for reasonable growth in tax recovery. He did not, however, share any strategy for achieving this goal. Various international organizations, including the International Monetary Fund (IMF), the World Bank (WB), and the Asian Development Bank (ADB), believe that Pakistan’s tax system is distorted and needs to be corrected. Tax evasion and tax exemptions are two of the most significant barriers to increasing tax collection.
For the past few years, the Federal Board of Revenue (FBR) and the World Bank have been collaborating on a project to increase tax collection and the number of taxpayers in the country.
It is worth noting that the new coalition government has set a target of Rs. 7,004 billion in tax collection for the FBR, an increase of nearly Rs. 1,000 billion over the expected tax collection for the current fiscal year.
During the upcoming fiscal year, the FBR’s total tax collection target will be Rs. 2.573 trillion through direct taxes and Rs. 4.431 trillion through indirect taxes.
Furthermore, the government has proposed raising the target for income tax by Rs. 441 billion to Rs. 2,558 billion for the fiscal year 2022–23, up from Rs. 2,117 in the previous fiscal year.
The government also proposed raising the sales tax target by Rs. 570 billion to Rs. 3,076 billion for the fiscal year 2022–23, up from Rs. 2,506 in the previous fiscal year.