KARACHI: The PML-N in its five-year tenure which ended on Thursday was able to raise the tax-to-GDP ratio to 13.7 percent from 9.8 percent.
And tax revenues in the last five years rose 106 percent on the back of reform initiatives and an uptick in economic activity according to official documents, reported The News.
Tax revenues increased to a projected Rs4 trillion for the present financial year from Rs1.94 trillion in 2012-13.
A Tax Reform Commission (TRC) had been setup by the government to oversee direct and indirect taxes, investigate autonomy and administrative structure of the tax regulator, rationalize import tariff and create a border force to deal with the illegal movement of good and individuals.
The government received suggestions from the TRC regarding reforms in the FBR in February 2015.
An implementation committee was then setup which was presided by Advisor to the Prime Minister on revenue for examining the proposals of the TRC.
Amongst the decisions taken by the PML-N, included the abandonment of using statutory regulatory order (SRO).
Over Rs290 billion of SRO/concessions were retired in last three years starting from 2014-15 to ensure a level-playing field for all tax-payers.
Vital concessions have been maintained and transferred to relevant laws. Also, the Federal Board of Revenue (FBR) doesn’t have the authority to notify any concessionary SRO’s.
The authority to publish SRO’s vests with the Economic Coordination Committee of the Cabinet.
The PML-N government decreased corporate tax rates from 35 percent to 30 percent in last five years and it is slated to fall further to 25 percent by the tax year 2023.
Import tariff also was brought down to 20 percent from 30 percent in last five years.
Also, the previous government announced the Benami Transactions (Prohibition) Amendment Bill 2016 which would assist the authorities in controlling property holding in the name of other individuals.
In the last five years, the PML-N raised the cost of business for non-compliant tax-payers and introduced different withholding tax rates for filers and non-filers via Finance Act 2015.
It was done to ensure that people would start filing their income tax returns.
To widen the tax net, the previous government introduced different rates of adjustable withholding of income tax for filers and non-filers on certain transactions.
The tax regulator has been utilizing third-party data to widen the tax base and originally the aim was to register 300,000 new tax-payers in three-years’ time.