Finance Minister said, the government had introduced progressive taxes in the federal budget for upcoming fiscal year 2024-25 to tax more those having high income.
Reiterating the pressing need for reforms and broadening of tax base, Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb asserted that below 10 percent tax to GDP ratio was not sustainable.
Muhammad Aurangzeb said, “We have to take it up to 13 percent in next three years gradually,” the minister said while addressing the post-budget press conference, adding as per the international bench marks, no country could sustain at 9.5 tax to GDP ratio base without external assistance. Hence, there is dire need to enhance tax to GDP ratio.
He also underscored the importance of doing away with undocumented economy with end-to-end digitization to reduce human intervention as much as possible and make the tax mechanism transparent and mitigate chances of corruption. The minister admitted that the Federal Board of Revenue could not do compliance and enforcement to the extent it should have done.
He said, the country needed to move on the direction of broadening tax base to make economy sustainable. Therefore, it was imperative to bring into tax net the retailers and wholesalers to share the burden.
He said, the government had launched tax scheme for retailers and wholesalers and they were offered to registration on volunteer basis, however it was termed unsuccessful as of April 2024. In May, the minister added, the FBR workforce mobilized itself and as of now around 31,000 retailers have registered themselves with the scheme.
He further said, the registration would continue and tax would also be imposed from July 2024. “We have no other option but to get this sector into tax net,” he remarked.
The minister said that Point of Sale (PoS) scheme would be re-launched to do away with cash transactions.
The finance minister said that the exemption and 35% category of salary slabs were intact, adding that there was change in other slabs falling between. He said, the government took up tax for non-salaried personals up to 45 percent.
