World Bank Thinks Pakistan is Still Not Taxing People Enough - Al Sadat Marketing

Table of Contents

In its most recent “Pakistan Development Update,” the World Bank suggested raising taxes on the salaried class as a first step toward expanding the tax base and regaining fiscal stability.

The income tax exemption threshold for salaried people (about Rs. 50,000/month) is established in an unfavourable way, keeping formally employed salaried people outside the tax net. At the same time, the bank noted that the threshold (Rs. 500,000/month) for the highest income tax rate for salaried people is also quite high and is probably only going to catch a very small percentage of taxpayers.

Read More: Interim Govt Forms Task Force to Bring Tax Reforms in Pakistan

It explained that there are large differences in tax-free allowances, tax brackets, and tax rates between salaried people and other taxpayers, which runs the danger of causing economic inefficiencies and opening up chances for income shifting to avoid paying taxes. Additionally, a sizable portion of the tax base, which consists of self-employed people and sole entrepreneurs, including retailers, is not subject to income tax.

Additionally, the Corporate Income Tax (CIT) rates distinguish between three distinct regimes with various tax rates and unique conditions that are applied to normal enterprises, small businesses, and SMEs in the manufacturing sector.

These differences encourage businesses to split apart or remain small. Additionally, Pakistan gives some businesses access to a simplified turnover tax regime, which benefits the businesses financially and lessens the incentives for them to spend money on formalizing their operations, expanding their customer base, and investing in accounting systems.

The CIT regime also offers a number of tax breaks. These include complete tax exemptions, lowered rates, credits, and exemptions that are given based on the industry, type of investment, and location. Due to Pakistan’s thin-cap provisions’ scant coverage, businesses have the opportunity to lower their tax obligations.

The bank has suggested enlarging the tax base by incorporating individuals and privately held companies, such as retailers, in the tax system, lowering the tax-free level, and streamlining the personal income tax’s structure. In order to prevent tax arbitrage, it has also advised combining the tax schedules for salaried and non-salaried taxpayers.

Additionally, the World Bank has suggested eliminating concessional rates for sales taxes on items, restricting zero ratings, and capping sales tax exemptions for necessities like food and certain financial transactions.

You can also invest in other famous and most in demand housing societies, such as , Blue World City,  Rudn Enclave7 Wonders City PeshawarTaj ResidenciaKingdom Valley,  New Metro City Gujar KhanForest Town RawalpindiUniversity Town RawalpindiICHS TownPark View City IslamabadMulti Gardens B17 Islamabad and Nova City Islamabad.

Al Sadat Marketing please contact 0331 1110005 or visit https://alsadatmarketing.com/

Few more real estate housing schemes which are trending now a days in Islamabad by including: Faisal Town Phase 2Prism Town Gujar KhanNew City ParadiseEighteen Islamabad7 Wonders City IslamabadCapital Smart City,  Silver City IslamabadThe Life Residencia,  Faisal Town IslamabadIslamabad Golf CityIslamabad Model Town and Marble Arch Enclave.

Al Sadat Marketing is an emerging Real Estate Agency headquartered in Islamabad, Pakistan. With over 10+ Years of experience, Al Sadat Marketing is providing its services and dealing all trending housing societies projects in different cities of Pakistan. Islamabad ProjectsRawalpindi ProjectsGujar Khan ProjectsBurhan Projects, and Peshawar Projects etc.

Book Your Plot Now: +92 331 111 0005

Tags :

Share :

About Author
About Author

Syed Sadat Hussain Shah

Talk to Us!

Latest Posts

Categories

Leave a Reply

Your email address will not be published. Required fields are marked *

ATTENTION

Experience luxury living just 20 minutes from Islamabad. With monthly installments starting at just 25,000 PKR, you can secure your dream home with No down payment and no hidden charges. Explore the perfect blend of comfort and convenience today!

Book Now