Tax Take Rises in Pakistan

October 20, 2014 Taxation in Pakistan

ISLAMABAD – Despite the fact that tax revenues are still not reaching government targets, the tax-to-GDP ratio seen in Pakistan has been shown to be on the rise.

Over the weekend the Federal Board of Revenue of Pakistan issued the FBR Biannual Review for the 2013 – 2014 financial year, showing that the national tax-to-GDP ratio during the time period reached 8.9 percent, while in the previous year the tax-to-GDP ratio was 8.5 percent.

Over the 2013-2014 financial year, tax collections in Pakistan reached a total of PKR 2 266 billion, while in the previous year tax collections were only PKR 1 946 billion, equating to a growth level of 16 percent.

It was noted that the levels of growth required to reach the government’s tax collections targeted are higher than the growth levels seen in the current financial year.

According to the experts of the FBR, the poor growth levels can be attributed to poor growth of exports, and inadequate investment into human capital and infrastructure development, with both aspects leading to stunted growth in the collection of tax revenues.

Photo By: Alan Cleaver