Karachi: Governor State Bank of Pakistan (SBP) Shahid Kardar has underlined the need of quick steps for broadening the tax base to bring the untaxed sector under the tax net.
Karadar said that Pakistan’s economy has shown signs of improvement but quick steps are needed to broaden the tax base to benefit from the growth in untaxed sectors, such as agriculture.
In an interview with an international new agency, Kardar said that he was worried by a “structural shift” of incomes towards the untaxed sectors.
‘This shift of incomes away from the tax paying sectors to non-tax paying sectors, the tax-to-GDP ratio is structurally destined to be hovering around lower levels,’ Kardar said.
It is to be mentioned here that Pakistan has one of the lowest tax-to-GDPÂ ratio in the world, which is currently around 10 percent.
“The structural shift now needs to be addressed in the next budget. All sectors of the economy need to be taxpayers beyond a certain level of income irrespective of the source of income.”
Kardar, however, said the government realises the importance of increasing its revenue and cutting expenditure, and was moving in the right direction, albeit slowly.
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