According to the newspaper reports, Finance Minister Ishaq Dar has told the Tax Reforms Commission to finalise a report about deliberations and proposals which were held with various stakeholders to introduce tax reforms in the country. Addressing the concluding session of the commission meeting, he said that the commission should also outline the proposals in its interim report to enable the government incorporate its recommendations in the annual budget 2015-16. The commission is considering various proposals to bring structural changes in the tax system and facilitate the taxpayers.The reforms will cover a business-oriented tax policy, tax collection methods, expansion of tax base,security issues on the country’s borders, anti-smuggling measures and assistance for the taxpayers. The reports also suggest that various stakeholders have been consulted on the issue, including the officials of the chambers of commerce and industry, Pakistan Business Council and technocrats.
The tax base in Pakistan is very low as compare to other countries in the region and steps are required to enhance tax net. On another note, a policy should be adopted to respect the dignity of taxpayers. In modern economies, taxpayers are considered as members of the privileged class and are given respect in every field of life. In the Pakistan, the matter is probably contrary to it. The economy of Pakistan is under pressure for the last many years and mishandling of the tax issues and embarrassment of the business community will not serve any purpose.The tax reforms in Pakistan are long been overdue to overhaul the tax system in the wake of changing economic scenario in the world. The commission is mandated with preparinga draft of recommendations to gradually withdraw presumptive tax regime, remove anomalies from the universal self-assessment scheme, exploit the potentials of value added tax and ensure implementation of tax reforms.
In a practical sense, the issue of sales tax is haunting small traders like a demon as a few unscrupulous elements within the business community give the buyers fake sale receipts without any record of the payment of sales tax on the official level. As a result, the fake receipts land a common businessman in a lockup or he is forced to pay fine without any fault of him. It is a need of the hour to change the existing sales tax regime and a procedure should be adopted to fix the sales tax evaders. A proposals is also under consideration to replace the standard rate of 17 percent sales tax by introducinga single stage sales tax. In either case, one can hope that the reforms in the tax system will not only help increase the tax collections, but will also broaden the tax net.