ISLAMABAD: In a recent address at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial revealed that the country’s tax revenue has stagnated at levels comparable to 2008. He emphasized that the entirety of this year’s tax collection is being consumed by interest payments on national debt.
Langrial acknowledged improvements in economic indicators, attributing this progress to the resilience of the business community following a few years of severe economic challenges. He noted a decline in inflation rates, which has led to a corresponding decrease in the policy rate. According to Langrial, there should ideally be no more than a 3-4% gap between these rates, and experts anticipate a potential reduction of up to 2% in interest rates, which would provide crucial support for the economy.
He also pointed out that the Goods and Services Tax (GST) rate has risen from 16% to 18%, underscoring the need for a more equitable tax structure. Langrial commended honest taxpayers, including business owners and industrialists, who contribute without resorting to evasion, and acknowledged the efforts of a small number of dedicated FBR officers working to enhance the national economy.
However, he expressed frustration over the fact that 90% of Pakistanis do not pay taxes. With 43 million households in the country, only 4 million have air conditioners, suggesting that many are not contributing to the tax base. Langrial advocated for lower corporate tax rates, suggesting that they should not exceed 25%, emphasizing that the burden should not fall disproportionately on the nation’s poor.
In related news, the FBR has extended the deadline for submitting income tax returns to October 31, 2024, following requests from trade organizations and tax bar associations. This extension allows taxpayers additional time to file their returns and navigate operational challenges, building on a previous extension from September 30 to October 14.
