Addressing business community of Gugranwala, the Prime Minister Imran Khan reiterated his firm resolves for prompting authentic tax culture and said that government will not yield to pressure tactics being applied to stop the documentation process of the economy. He said that in a country of 220 million only 300 companies pay 70 percent tax and the 20 percent service sector pay 1 percent tax, adding, that the number of tax filers has now gone up to 1.5 million.
There can be no two opinions about the Prime Minister’s vision of authentic tax profiling and building a strong tax culture. The policy of appeasement and caving in against the traders’ pressure in the past had proved detrimental to efforts for expanding tax base by way of direct taxes. Expenditure slippages and filling the fiscal hole by raising revenue through regressive indirect taxes and jacking up electricity and gas tariffs and petroleum products prices made the economic environment extremely unfavourable. The country slipped down several rungs of ladder to 147th position on the World Bank of Ease of Doing Business Index of 2017. In the present government the ranking has improved to 125th position on the global Ease of Doing Business Index. But the economic environment for investment is still far from satisfactory.
The Prime Minister assured the business leaders of tax payment regime easy and favourable by eliminating the coercive practices of tax officials and lamented over the corruption of tax collection machinery which amounts to Rs.700 billion. It is matter of common knowledge that Sales Tax Wing of the Inland Revenue Services Department does not get details of sales tax receipts from the registered firms about its deposit in the authorized banks. Likewise, field officers and staff used to receive a paltry sum as bribe instead of accessing the taxable income of unregistered sole proprietorship and partnership firms to collect tax and deposit it in the government exchequers. Similarly, the Appraisers of Custom Department don not exactly access the amount of custom duty on legally imported goods.
A section of small traders is opposing the documentation drive of the government and are unwilling to be registered for income tax and sales tax payment. It was the duty of the field formations of Inland Revenue Services Department to have made frequent interactions with small traders by using the platform of trade bodies. As they are not doing their job, therefore, the Prime Minister is interacting directly with businessmen.