Pakistan’s Tax System To Undergo Major Shake Up

by Lorys Charalambous, Tax-News.com, Cyprus

07 April 2005

Pakistan’s main tax collection agency, the Central Board of Revenue, is to undergo a comprehensive four year programme of reform in an effort to increase revenues from the notoriously inefficient tax system.

According to reports in the regional media, the reforms will be partly funded by the World Bank and the UK government, and will bring about more emphasis on self-assessment, together with greater automation of the tax system in a bid to reduce the bureaucratic burden and stamp out corruption.

Currently, only 1.1 million of Pakistan’s total population of 150 million pay any income tax.

Commenting on the reforms, Central Board of Revenue spokesman Hafeez Mughal, explained: "It would increase the revenue and the base of taxpayers, improve efficiency and make the tax regime friendly for the payers.”

According to the spokesman, the bulk of the $149 million cost of the modernisation will be borne by the World Bank, which is contributing just under $103 million. In addition, the UK’s Department for International Development has allocated $23 million to the project, while Pakistan's government is itself contributing a similar sum.

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