1. Pakistan tax policy
Porf: faisal javeed

2. Group members
• Nouman Quresh
• Rana ejaz
• Umer salem
• Marria
• Kashif mushtaq
• Taous rubab

3. Taxes matter
• Taxes affect citizens, economy of the country, businesses,
governance mechanisms, etc. Not only revenue
mobilization, an effective system of taxation helps in
formalizing the economy, encourages economic growth,
shapes political cohesion between tiers of the
Government, and results in increase in social sector
service delivery.

4. The tax collected in Pakistan is inadequate to
meet the needs of the society

5. CURRENT SITUATION REVENUE
ANALYSIS

6. Pakistan’s revenue as proportion of its GDP is
lowest amongst the emerging markets.

7. Total Government revenue increased by 17
percent in real terms between 2005-06 and 2013-
14.

8. Total Government revenue increased by 17
percent in real terms between 2005-06 and 2013-
14.

10. Out of the total revenue, tax collections have increased by 27
percent in real terms since 2005-06.
Revenue Heads
2005-06
PRs. bn
Share in Total Tax
Revenue
2013-14
PRs. bn
Share in Total Tax
Revenue Nominal
Change
Real
Change
Total Tax Revenue 804 2,075 158% 26.7%
Federal Government Tax Revenue 767 95% 1,968 95% 157% 25.9%
Direct Taxes 215 27% 732 35% 240% 67.0%
Indirect Taxes 501 62% 1,150 55% 129% 12.6%
Sales Tax 295 37% 809 39% 174% 34.6%
Custom Duties 138 17% 218 11% 58% -22.4%
Federal Excise 68 8% 122 6% 79% -12.0%
Levies & Surcharges 51 6% 87 4% 71% -16.3%
Petroleum Levy 25 3% 60 3% 141% 18.4%
Gas Development Surcharge 26 3% 23 1% -12% -56.8%
Others - 0% 4 0%
Provincial Tax Revenue 37 5% 107 5% 191% 42.8%
Indirect Taxes 37 5% 107 5% 191% 42.8%
Property Taxes 9 1% 8 0% -13% -57.3%
of which: Agriculture Tax 1 0% 1 0% 25% -38.7%
Duties (Excise and Stamp) 12 1% 21 1% 73% -15.3%
Motor Vehicle Tax 7 1% 11 1% 59% -22.2%
Others* 8 1% 67 3% 743% 313.6%

11. Since 2005, the average general government12
tax to GDP ratio was around 9.4 percent of
GDP

12. Tax collection by the Federal Government as a
proportion of GDP is only slightly below that in
India, Bangladesh, China and Indonesia.

13. Of the total Federal Taxes collected in Pakistan, the
proportion of taxes on incomes and profits is low compared
with other selected countries

14. The share of direct taxes in the total taxes increased from 35
percent in 1998 to 39 percent in 2014, while the share of indirect
taxes fell from 65 percent to 61 percent
Direct Taxes Indirect Taxes Total
YEARS
Share in total Annual
Growth
Share in total Annual
Growth
Annual
Growth
Taxes (%)
(%)
Taxes (%)
(%)
(%)
1998-99 35.1 21.3 64.9 -3.3 4.1
1999-00 35.7 6.8 64.3 0.6 9.4
2000-01 32.5 2.5 67.5 18.1 12.5
2001-02 31.8 10.3 68.2 14.3 13.0
2002-03 35.3 14.4 64.7 -2.3 3.0
2003-04 33.0 6.6 67.0 18.0 14.0
2004-05 31.7 8.7 68.3 15.2 13.1
2005-06 31.1 11.1 68.9 14.4 13.4
2006-07 31.5 22.7 68.5 20.0 20.8
2007-08 39.4 48.3 60.6 5.1 18.8
2008-09 38.5 16.2 61.5 20.8 19.0
2009-10 38.2 14.4 61.8 15.7 15.2
2010-11 39.6 18.6 60.4 11.7 14.3
2011-12 38.7 14.5 61.3 19.2 17.4
2012-13 39.2 22.6 60.8 19.7 20.8
Average 35.4 15.9 64.6 12.5 13.9
Average since 2005-06 37.9 22.5 62.1 16.0 18.0

15. Pakistan tax policy
• FEDERAL TAXES
• PROVINCIAL TAXES

16. Number of tax payers in Pakistan

18. Following are some specific suggestions to reduce the burden of
import taxes and simplify each of the major taxes.
• multiple sales tax rates
• sales tax from petroleum
• Income Tax

19. The following new sources for collecting
income tax are being proposed
• total assets
• inheritance tax
• third party information
• sale of immovable properties if sold after ownership of
more than two years.
• Another problem is that within domestic taxes, over 70%
of the tax burden is placed on manufacturing, despite the
fact that its share in Pakistan’s GDP is about 25%.
Agriculture, which constitutes about 20% of GDP,
contributes less than 1% of tax. Similarly, services
constitute 54% of GDP but contribute only 25% of total
taxes.

20. NADRA Database

21. Withholding Tax Reform

22. Customs Duty:
• There should be a maximum of three tariff slabs, for
example: 5% (raw materials), 10% (intermediary goods)
and 20% (consumer goods). There should also be a
conscious policy

23. Savings Tax:

24. Capital Gains Tax:

25. Corruption
• customs department
• dedicated personnel should be hired
• the tax machinery should be held accountable
• any abuse of authority if observed should be punished
suitably
• honesty and reward hard work in the tax machinery

26. Reduction in Non – Developmental
Expenditure:

27. Elimination of Black Economy:

28. Formation of Intelligence Tax Bureau:
• Monitor the online transaction
• Intercept the financial dealings
• to reduce the money laundering
• financial data of Pakistani citizens from foreign countries.
• Make check over officials who directly deals with the
collection and assessment of tax.

29. Reformation of Legal procedures:

30. STRATEGIC SHIFT AGENDA

31. Conclusion