KARACHI, April 11: The Central Board of Revenue (CBR) is striving hard to improve the tax-to-GDP ratio and is seeking help from the tax bars to expand the tax base to achieve this goal. Addressing a pre-budget seminar organized by the Income Tax Bar Association, Karachi (ITBK) here on Monday, Member Tax Policy and Reforms, CBR, M S Lal said that many countries of the region had succeeded in their efforts to improve the tax—to-GDP ratio but Pakistan had failed because all moves were made without bringing in administrative reforms in the CBR.

Pakistan’s tax-to-GDP ratio, which is one of the lowest in the region, is 13-14 per cent compared to 17 per cent for developing countries and 30 per cent for industrial countries.

The CBR member said that many people may be paying tax but it was not necessary that all of them were also filing their tax returns, which is mandatory under the law. Therefore, he urged the ITBK to assist the CBR in increasing the number of people who file their tax returns.

Mr Lal said that many efforts were made to increase the number of taxpayers but they did not produce any positive results due to lack of administrative reforms in the tax collecting machinery.

However, he said that the tax reforms during the last couple of years had made a lot of improvement in the working and capacity of the revenue collecting machinery yet there were many areas which needed to be amended. “Taxpayers still need more facilitation and the discretionary powers of tax officers have to be further curtailed,” he added.

Further, he said that it was also needed to restructure the entire working of the CBR for which more reforms would be brought in to meet the growing challenges of the electronic era.

He asked the ITBAK to help the CBR in making amendments in assessment law under Section 122 and Section 177 for audit. Without brining in necessary changes in the law it was not worth to keep bringing in administrative reforms in the CBR.

Abdul Qadir Memon spoke on Direct Taxes and Majid Khandwala deliberated on Indirect Taxes.