Building tax capacity: Govt urges to adopt holistic approach

F.P. Report

ISLAMABAD: Chairman Pakistan Hitech Hybrid Seed Association (PHHSA), Shahzad Ali Malik, on Thursday, emphasized the urgent need for governments to adopt a holistic and institution-based approach to build tax capacity with a focus on leveraging core domestic tax policies.

Talking to a delegation of industrialists, he called upon the government to implement bold reform plans and focus on tax base broadening through the rationalization of tax expenditures, more neutral taxation of capital income, and better use of taxes, said a news release issued here.

He said this multi-pronged approach, over the long term, can balance equity and efficiency considerations.

He said the government must improve the design and administration of core domestic taxes—value-added taxes, excises, income taxes, and corporate income taxes. Shahzad Ali said revenue in low-income countries for instance could be doubled by limiting preferential treatments and improving compliance without increasing standard tax rates.

The widespread adoption of digital technologies would result in higher revenue collection and narrow compliance gaps, he added.

Shahzad Ali Malik said to improve the institutions that govern the tax system and manage tax reform that requires adequate staffing to forecast and analyze the impact of tax policies on the economy.

He said greater professionalization of public officials working on tax design and implementation, and better use of digital technologies to strengthen compliance, transparency and certainty in how policy and administration are translated into legislation.

He urged the government to carefully prioritize and coordinate reforms across government agencies because the broader institutional context matters.

This creates a virtuous circle by which enhanced institutions improve state capacity, which in turn increases the quality of tax design and its acceptance by citizens. (APP)