Islamabad : Former President of the Islamabad Chamber of Commerce and Industry (ICCI), Dr. Shahid Rasheed Butt, said on Monday that a few lakh taxpayers cannot run a country with a population of 240 million.
Paying taxes is not only the responsibility of the salaried and poor classes, while the rich and influential have been given a free ride, he said.
Shahid Rasheed Butt said in a statement issued here today that those who earn millions and billions are kept out of the tax net for political favours which has ruined the country.
The elements that distort the economy for personal interests should be dealt with strictly; otherwise, the country will be dependent on borrowing while the masses will never get any relief, he said.
Shahid Rashid Butt said that a country cannot survive where the majority of people are outside the tax net, and a large number of big businessmen think it is better to give donations to politicians instead of paying taxes to the government.
He said that business should be allowed in the country, but looting in the name of business should not be allowed.
The business leader said that a report by an international organization has revealed that there are only five industrial sectors in Pakistan that steal taxes worth Rs 956 billion annually, which include real estate, tea, cigarettes, tires, and pharmaceuticals.
He added that forty per cent of the economy is with retailers and wholesalers, who pay negligible taxes while smuggling under the guise of transit trade has become a parallel economy.
Only the poor and salaried class remain in the tax net, and they are subjected to harsh taxation which is regrettable, he said.
He noted that our tax system has been faced with several challenges, including low tax-to-GDP ratios, a narrow tax base, and high rates of tax evasion. According to the World Bank, Pakistan’s tax-to-GDP ratio was only 10.4% in 2020, which is significantly lower than the average of 15.3% for countries in the South Asian region.
Economists have proposed that a low-rate, flat, broad-based, and predictable tax regime can help Pakistan overcome these challenges and achieve greater economic growth and development.
Mr. Butt said that the Federal Board of Revenue has decided to include 1.5 million people in the tax net, including doctors, engineers, lawyers, and other businessmen who avoid paying taxes. This is a welcome step that needs to be implemented with full force, he demanded.
