ISLAMABAD: Federal Minister for Finance and Revenue Muhammad Aurangzeb emphasized on Wednesday it was crucial to widen the tax net by removing the “non-filer category” after presenting the first federal budget of the newly elected Pakistani administration which he said was in line with the International Monetary Fund (IMF) requirements.
The non-filer category includes those individuals or entities who, despite earning taxable income, do not file returns and refuse to be formally documented or contribute to the tax base as required.
Pakistan has faced significant challenges with tax evasion and a low ratio of tax filers compared to its population. A considerable number of potential taxpayers either avoid taxes altogether or do not file their returns, which leads to substantial revenue losses for the government.
Speaking to Pakistan’s Geo TV, Aurangzeb said he wanted to take the country to a sustainable tax-to-GDP ratio in the next three to five years.
“I don’t understand this term of non-filer,” he said. “This is the only country where there is a category of non-filers. What is a non-filer? Either you are paying taxes and you are on the active tax list or you are not.”
“The eventual end goal is that we have to eliminate this non-filer category from this country,” he added.
The government has set an ambitious revenue collection target of Rs13 trillion, which comes to about $47 billion, in the next fiscal year raise the overall tax-to-GDP ratio of 9.5 percent.
The minister said the budget had introduced punitive measures for those who refused to file taxes so they thought twice before refusing to bring their income on record.
Asked about the enforcement of tax reforms, he said the government was striving to digitize the whole system.
“The end-to-end digitization will help us with several things,” he said. “Why don’t people want to come into the [tax] net? They are afraid of being harassed. They think they will not be treated properly. The more we remove the human intervention in FBR [Federal Board of Revenue], that is the way to create trust and earn trust.”
Aurangzeb said the government had decided to treat health, education and agriculture as priority sectors and protected the salaried class.
However, he reiterated that the government’s aim was to move a direction where everyone was contributing to the national economy.
Pakistan’s finance chief pushes tax reforms matching IMF guidelines following budget presentation
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Pakistan’s finance chief pushes tax reforms matching IMF guidelines following budget presentation
- Muhammad Aurangzeb says the government is striving to digitize tax system for improved revenue collection
- He says that he wants to take the country to a more sustainable tax-to-GDP ratio in the next three to five years
Pakistan offers seaport for global cargo transshipment amid Gulf conflict escalation
- Karachi Port Trust says its services can ensure ‘continuity and stability’ of maritime trade
- The region is currently witnessing significant disruptions to global trade and oil shipments
KARACHI: Pakistan has offered its Karachi seaport for uninterrupted global cargo transshipments as escalating Middle East tensions threaten maritime trade, the country’s largest port operator said on Friday.
Iran has been rocked by joint US and Israeli strikes since Feb. 28 that killed Supreme Leader Ayatollah Ali Khamenei. Tehran retaliated with missile and drone attacks on US, Israeli and allied targets across the Gulf, plunging the region into conflict and uncertainty.
The escalation disrupted air travel, heightened military activity, and disrupted shipping through the Strait of Hormuz, a key route carrying roughly 20 percent of global oil shipments.
The Karachi Port Trust (KPT) said in a statement it was ready to support international shipping lines by offering transshipment services to regional ports, helping ensure the “continuity and stability” of global maritime trade.
“Karachi Port Trust remains fully prepared to support the international maritime community and to provide reliable, efficient, and secure port services in the interest of sustaining regional trade connectivity,” KPT Chairman Shahid Ahmed said, according to a statement circulated by the port authority.
It added the facility could help stabilize maritime trade by offering transshipment services for cargo destined for ports across the region.
The statement said as a demonstration of its capability, international vessels MV TS TACOMA and MV TS SYDNEY arrived in Karachi and discharged large number of containers as transshipment cargo.
“The containers will subsequently be transshipped from Karachi to Jebel Ali in the Middle East,” it continued.
Pakistan Maritime Affairs Minister Junaid Anwar Chaudhry on Thursday highlighted the importance of the Gwadar port city’s transshipment role as major shipping routes face disruption from the ongoing conflict.
The developments come as the Strait of Hormuz, a strategic waterway between Iran and Oman and one of the world’s most critical oil transit routes, has been blocked by Iran which has threatened to attack ships that attempt to transit through it.
US President Donald Trump has assured shipping companies of naval escorts and insurance support to protect vessels.
The escalating tensions have contributed to a sharp rise in energy prices and significant disruptions to tanker traffic through the strategic waterway.
Pakistan has long viewed its seaports as strategic assets that could boost trade with Central Asia and the Gulf region, while helping the country earn valuable foreign exchange.
