SINCE the ongoing economic crisis hit the country in the closing months of 2021, successive administrations have increased their drive towards collecting tax revenues. As the current tax-to-GDP ratio is a bare minimum in comparison to other developing countries, the target has been to bring the ratio in line with the world average.

The Federal Board of Revenue (FBR) has sought various strategies to enhance tax revenues in the country. Prior to expanding the tax net, however, the government should overcome the trust deficit among the taxpayers, who are not sure if their money is going to be used for the right purposes.

Pakistan’s standing is alarmingly low on the Corruption Perceptions Index (CPI). With such a low credibility, voluntary tax payment is like daydreaming. Not a single retailer, wholesaler, trader, entrepreneur or anyone else would wish to throw their hard-earned money to finance corruption within the system.

The government is just a mediator between taxpayers and the public, not a tax-owner. Before the government intro- duces any strategy or plan to improve collection, it must improve credibility.

Muhammad Ilyas
Zhob

Published in Dawn, May 18th, 2024