Tax only country; everything private sector for national development: Kamalya Federal Finance Minister’s press conference
Kamalya: Schools can run on charity, universities can run on charity, hospitals can run on charity but not country. Everything should be given to the private sector for national development. The only thing which runs this country is tax and exemption of tax needs to be brought down gradually. We’re widening the tax net; people don’t want to come into FBR’s tax net due to harassment.
Addressing a press conference in Kamalya here today, Muhammad Aurangzeb said that there is a dire need of structural reforms in the financial system of the country. He added that while it is true that charitable donations can help in running educational institutions and healthcare facilities but one sustainable national economy which could flourish need strong taxation system. Taxes are crucial for any nation striving for significant progress. Pakistan, like any other country, must heavily depend on taxes to drive such growth. Private individuals play a key role in achieving these goals.
He emphasized that the government was working diligently to bring those sectors, traditionally left out of the tax net, into compliance, thereby broadening its base. He told them that 32 thousand retailers are already registered, and these retailers will start paying taxes from July. This is part of a broader strategy where no class shall remain untaxed—every person must pay direct taxes without fail, especially considering the current low level of about 9.5% GDP ratio. He stressed that we need at least 13.5%, if not more.
According to him, these efforts include enforcement measures such as ensuring compliance and implementing existing laws. Enhancing the capabilities to track and eliminate fraud in the sales system is crucial. A comprehensive trace system for cement, sugar, and fertilizer should have started, but various delays have prevented us from receiving the expected revenue. The tobacco sector also faces similar issues. Digitization and reducing corruption within these sectors would lead to more efficient collection processes and more transparent taxation. Automating revenue systems and federal boards would further increase efficiency. Although these measures should extend to more industries, delays have hindered progress. The current tax-to-GDP ratio is unsustainable, and there is a target to increase it to a higher level each month this year.
Aurangzeb emphasized, “The entire economic system depends on taxes, and for GDP to grow, we must collect taxes. Previously, authorities are now bringing sectors that evaded taxes into the tax net. Registration of 31000-32000 retailers is a major step in expanding the tax net. Taxes applied on these retailers from July will improve revenues and bring more businesses under compliance.
Muhammad Aurangzeb also spoke about public’s lack of trust in FBR due to harassment fears and receiving unreasonable notices. He understands people’s concerns because he himself has worked in private sector before entering politics. While it may be true that some people have reason to fear harassment by FBR or receive unfair notifications from them. Avoiding paying taxes altogether does not help solve this problem either. Government needs work towards making business individuals’ lives easier. When dealing with taxation while improving processes within FBR itself so. As reduce corruption through automation digitization leading efficient transparent collections
Aurangzeb concluded by insisting on a necessity for even-handedness in policies and steps to reduce institutional shortfalls. He said, “We must address corruption directly. Moreover, we should strengthen the economy by developing the agriculture and IT sectors, which have significant growth potential. With this, Pakistan can secure a stable economic future full of prosperity. The finance minister’s vision involves completely changing the tax system so that. All sectors make an equal contribution towards nation building while making tax collection process clear and effective.
