Pakistan Business Council advises Finance Minister on tax collection strategies

The Pakistan Business Council (PBC) has recently advised Finance Minister Muhammad Aurangzeb on enhancing tax collection from the informal sector. The PBC highlighted discrepancies in economic indicators and tax filings, proposing measures to broaden the tax base. This advice comes in light of the government's upcoming budget plans, which include new tax measures such as higher withholding taxes for non-filers and increased rates for property transactions and vehicle registrations.

One of the key suggestions put forth by the PBC is to reassess property values to discourage the use of real estate for illicit funds. They also recommended reintroducing a POS prize scheme to motivate retailers to issue tax-compliant invoices. The council proposed lowering sales tax rates for POS-integrated retailers and exempting them from audits for a specific period. Furthermore, they called for clearer guidelines on taxing rental income from land and property.

Emphasizing the importance of the agriculture sector in contributing to the GDP, the PBC proposed revising tax rates in this sector and making income tax filings mandatory for all agriculturists. Additionally, they suggested increasing tax rates for non-filers to promote compliance.

The PBC's recommendations aim to improve tax compliance, especially from the informal sector, and establish a more equitable tax system that encourages filing and discourages tax evasion.