- WB calls for bringing the real estate sector to the tax net.
- Hopes that the sector will be recorded with precision and taxed.
- The lender suggests a rationalization of the tariff structure.
Islamabad: drawing the tax system from Pakistan very “unfair and absurd”, the World Bank said that the increased burden of the salaried class could only be reduced by broadening the tax base and incorporating all income in the tax net, The news reported Thursday.
The lender, while calling for bringing the real estate sector into the tax net and ensuring that it has been recorded with precision and taxed, suggested the rationalization of the tariff structure, as short -term gains, it causes losses to the long -term sources of income.
Speaking during a session entitled “Pakistan’s fiscal trajectory: Improving transparency and confidence”, vice-chancellor (VC) Nadeem Javaid, Vice-Chancellor (VC) Nadeem raised a point that 40% of development expenses were siphoned on the form of commissions, because no bill is erased). It is a fact and known to everyone, he added.
Other participants in a session, entitled “Considering the tax trajectory of Pakistan: to improve transparency and confidence” during the PIDE conference, suggested that Pakistan must reform its tax system by widening the tax base, by fully digitizing its processes and reducing the burden of the salary class.
Tobias Haque, principal economist in the country of the World Bank, praised the taxation of agricultural income tax (AI) by the provinces as a step in the right direction. He stressed that precise documentation and taxation in the real estate sector are now essential.
“The digitization and expansion of the tax base to include all income flows can help facilitate the tax burden of the salaried class,” added Haque.
He described it as “absurd” that only 5 million people produce income statements in a country of 240 million, while a large part of the income comes from the regressive general sales tax (TPS). “Pakistan’s tax system is inequitable. With only 5 million declarants, the system will remain unbearable,” he added.
Dr. Ali Salman, Executive Director of the Policy Research Institute of Market Economy (premium), called to reduce the number of restraint taxes (WHTS). “There are 88 restraint taxes, and 45 of them generate less than Rs1 billion per year. We need clarity and simplification,” he said. He stressed that the Federal Board of Return (FBR) is currently collecting 1.2 Billion of rupees per year via Whts.
Panelists have agreed that despite the availability of tools and diagnoses, Pakistan has not yet reached significant tax digitization due to political resistance, outdated legal frameworks, institutional disconnections and lack of administrative motivation. They stressed that successful digital transformation requires integration of the end -to -end system, access to real -time data and automated workflows.
A recurring theme was the erosion of public confidence in the tax system, fueled by incoherent policies, limited transparency and biased tax burden. The speakers highlighted the need for simplified tax codes, integrated digital infrastructure, updated labor laws and performance -based incentives to restore the confidence of taxpayers.