2009年-世界发展银行全球_Pakistan_-_Tax_Policy_Report___Tapping_Tax_Bases_for_Development_-__Summary_Report_19页_705kb

Pakistan Tax Policy Report Summary

Core Content

This report, Report No. 50078-PK, is a joint effort between the Federal Board of Revenue (FBR), the Government of Pakistan, the Andrew Young School of Public Policy (AYSPS) at Georgia State University, and the World Bank. It focuses on the need for comprehensive tax policy reform in Pakistan to improve tax collection, increase revenue, and support sustainable development and economic growth.

Fiscal Year and Currency

• Fiscal Year: July 1 – June 30
• Currency Unit: Pakistan Rupees (PKRs. or Rs.)
• Exchange Rate: US$1 = 83.14 PKR as of July 2009

Key Challenges

• Pakistan's tax system underperforms due to a narrow tax base, tax evasion, distrust of public institutions, and administrative weaknesses.
• The tax-to-GDP ratio increased from 9.6% (1999-2000) to 10.3% (2007-08), but remains below that of other developing countries in the region.
• The tax gap is a significant issue, with 79% of actual tax receipts lost to evasion in 2007-08, equivalent to over Rs. 796 billion.
• Provincial taxes contribute less than 0.4% of GDP, creating a heavy reliance on central fiscal transfers.

Tax Policy Reforms

The report outlines a set of structural tax policy reforms aimed at:

• Broadening the tax base
• Lowering tax rates
• Simplifying compliance procedures
• Increasing enforcement effectiveness

These reforms are expected to increase the tax-to-GDP ratio from 10.4% (2007-08) to 13.9% (2012-13), as outlined in the 2009 Poverty Reduction Strategy Paper (PRSP).

Revenue Impact of Reforms

The estimated revenue impact of the proposed reforms is Rs. 400 billion, or 3.8% of GDP:

Main Points and Key Information

1. Need for Structural Reform

• The current tax system is inefficient, unfair, and unstable, leading to low and volatile tax revenues.
• A comprehensive reform is necessary to support sustainable development and economic growth.

2. Tax Gap and Evasion

• The tax gap is a measure of tax evasion, not avoidance.
• Tax evasion is widespread, with some sectors reporting as high as 57% unreported income.
• The tax gap is 79% of actual tax receipts in 2007-08, suggesting a large room for improvement.

3. Tax Morale and Compliance

• Tax compliance is influenced by tax morale, which is affected by perceptions of fairness and value for money.
• Efficient tax administration is crucial to increase compliance and reduce evasion.
• The FBR needs to adopt a comprehensive risk-based compliance strategy to improve enforcement and data accuracy.

4. Equity and Efficiency

• The proposed reforms aim to increase tax equity and efficiency.
• The distribution of tax burden will remain progressive, with the largest proportional increase for the seventh to ninth deciles.
• Horizontal equity will improve through the removal of exemptions and preferential treatments.
• Vertical equity will be supported by simpler and lower tax rates.

5. Implementation Strategy

• A gradual implementation of reforms is suggested to avoid backlash and ensure political support.
• Separating approval from implementation can help overcome resistance from affected groups.
• Stakeholder involvement is crucial to ensure support and transparency throughout the reform process.

Conclusion

• Tax reform is essential for Pakistan's development and economic stability.
• Structural changes in both tax policy and tax administration are necessary.
• The success of tax reform depends not only on mechanisms but also on political will and public support.
• Comprehensive and fair tax reform is required to address the current fiscal challenges and improve the investment climate.