ISLAMABAD: The cost of tax collection in Pakistan has been reduced from 0.89 paisa to 0.72 paisa on every hundred rupees during the last nine years which is reasonably low as compared to many countries.
A report of Strategic and Planning wing of Federal Board of Revenue has revealed that the cost of collection in Pakistan has been in the range of 0.74-0.89% in the last nine years. It means that FBR is spending 72-89 paisa on the collection of every Rs100.
Moreover, the cost of collection declined from 0.89% in 2007 to 0.74% during 2016-17. According to the FBR Strategic and planning wing, although it is a good omen that expenditure of the revenue body in the country has declined in the last two years.
The reduction in cost of the collection during 2016-17 is mainly due to healthy growth in the tax collection while expenditure increase is quite normal. Data of tax collection reveals that cost of collection is comparatively higher for customs than the Inland Revenue.
In fact, cost of collection for customs has been on average 2% while 0.5% in case of Inland Revenue in the last nine years.
There is an explanation of higher customs cost of collection. The import related taxes other than customs are also collected by the customs departments where no extra expenditure allocation made to customs Collectorates.
