LAHORE: Downward revision in the tax collection target should be a concern for the economic managers who are already sacrificing expenditures towards poverty reduction, education and health due to increased spending on law and order, a survey released by Sustainable Development Policy Institute (SDPI) said.
The survey highlights that two immediate reforms needed to kick-start economic growth and create jobs. These include tax reforms to finance growing government expenditure and energy reforms to support private sector’s pursuit for growth, competitiveness and market access.
Similarly on the energy front even before the start of full-blown summer, industry is facing 12 hours of power shortages.
The survey reveals that 68 per cent respondents think that the tax system in Pakistan is neither fair nor transparent. 91 per cent taxpayers believe that their tax contributions are not effectively utilized for redistribution and welfare of the poorest.
Among the informal enterprises (implying unregistered business firms), 57 per cent stated that no incentive scheme will compel them to register with the tax authorities. They also feel that the only way government achieves a higher income tax is by burdening existing tax payers and there are no serious efforts in widening the tax base. Sectors such as agriculture and services continue to be exempted from the tax net.
47 per cent of taxpayers feel that the filing of returns is a complex process and needs simplification. They also complained about problems with the web portals maintained by FBR for filing returns. 71 per cent respondents felt that general sales tax rates were too high and non-responsive to economic growth and inflationary pressures faced by the medium and low income groups.
77 per cent enterprises despite having complaints have never registered grievances with FBR. Many felt that seeking help may imply future intrusion and possible harassment. 31 per cent respondents have provided in-kind or monetary gifts to tax officials in the past.
On the energy reforms there were 53 per cent respondents who felt that the energy prices had become too high for their household budget and 71 per cent of these respondents have reduced the amount of power being utilized. Many have reported cutting back their household expenditures towards food, health and education.
65 per cent of the respondents proposed that gas supplies should be diverted to saving jobs in industry. The government in this regard may reduce gas supplies to the transport sector.
Due to increased power tariffs, 38 per cent respondents had reduced the electricity consumed by their businesses, in turn implying a reduction in output. 42 per cent respondents have witnessed instances of electricity and gas theft in their area. There were 2 per cent respondents who confessed resort to illegal means for maintaining their power consumption.
