ISLAMABAD, Nov 22: Prime Minister Shaukat Aziz has asked tax officials of the Islamic countries to address rampant malpractices by reducing human interface and taking away the discretionary powers of tax collectors.

Addressing a conference organised by Association of Tax Authorities of Islamic Countries (ATAIC) here on Wednesday, the premier said there was a need to raise the level of fiscal effort by broadening the base of income and sales tax.

“This is crucially important for enabling the government to meet the rising demand for social and development spending while continuing to reduce the debt burden,” he added.

More than 65 top tax officials from 20 Islamic countries were attending the conference aimed at increasing cooperation in tax related issues.

Mr Aziz suggested that tax administration reforms must focus on fundamental changes in human resource management and increased application of information technology to achieve greater efficiency and transparency in business processes.

He said efforts should be made to develop an efficient, transparent and client-friendly taxation system based on international best practices and under-pinned by a relationship of trust between taxpayer and tax collector.

The prime minister said the taxation systems in many of Islamic countries suffer from a number of structural weaknesses - tax bases are narrow and punctured due to exemptions and concessions. As a consequence of this, he said tax rates were high, creating a vicious circle of tax base erosion and higher tax rates. There was an over-reliance on trade-related taxes which generate inefficiency and distort allocation of resources.

He said multiplicity of taxation and cumbersome procedures were hampering private investment.

Mr Aziz said the outcome of our tax reforms in Pakistan was well known. “There has been a buoyant growth in revenue”, he added.