Tax rates need to be set right: FBR chief

LAHORE: Lambasting the culture of tax evasion in the country, Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial said on Saturday those advising on how to fix the system later on turn out to be tax-evaders.

The FBR faced a significant tax shortfall of Rs386 billion from July to December. The revenue collection stood at Rs5,623 billion in the first six months of the current fiscal year, falling short of the desired target of Rs6,009 billion.

The IMF had given an indicative target of Rs6,009 billion till the end of December 2024, but the FBR managed net collection of only Rs5,623 billion during the first six months of the current fiscal year. Speaking at ThinkFest, the FBR chairman said those individuals who were liable to pay tax were not fulfilling their responsibilities properly. There were problems among both the taxpayers and collectors, he said adding that tax rates in the country were not correct. “Tax rates in Pakistan are wrong, which should be fixed,” he added. The chairman said that the tax system was designed to bring the top 5 per cent of the wealthy into the tax net. He vowed to collect revenue worth Rs13,500 billion this year. Responding to a question, the FBR chairman said: “Pakistan doesn’t fall among the overtaxed countries.” Neither we are paying full taxes nor getting full services in return, Langrial added. The salaried class is included in the tax net as the authorities concerned have failed to collect taxes from wealthy people. The government was aware that the tax rate on certain items should be reduced, the FBR chief said.

He said the government would introduce a new law that would make shopping difficult for those who did not submit their tax returns.

Over 0.4 million retailers were included in the tax net this year, he said, adding that the retailers are yet to disclose their monthly income. He also stressed the need for stopping smuggling of petroleum products.