Tax to GDP ratio of revenue collection can be doubled by digitalizing the tax system in the country, says economy expert Yusuf Nazar.
The economist was speaking to journalists at a press conference by Ittehad Organisation presided by Justice Wajihuddin. He asserted that “we can raise tax collection bar to 22 percent from existing 11 percent by digitally transforming the whole system.”
He was of the view that the menace of corruption especially in the tax collection system can quickly be curtailed implementing the digital tax system where all the discretionary powers of the employees can be monitored on a central database under the FBR.
More than 50 million bank accounts have been registered in the country while there are above 150 million mobile users, Mr. Yousaf claimed that if proper strategy is developed, there is no way that why tax to GDP ratio could not be doubled.
Almost 90 countries in the world have already executed digital tax system sensing the need of the hour as no country can survive with a shaky economy and old school collection systems.
“There are plenty of researches that shows substantial investments can be fetched once tax to GDP ratio traverses the 15 percent mark.” Yusuf Nazar said.
He added that most of the countries around the globe make sure that they have correct addresses of the bank account holders while in Pakistan many banks present checkbooks and bank statements physically to persons.
He suggested that government should bound the banks to only use postal means for assuring that they always have the permanent address of the account holders, this will not only help in diminishing money laundering but also reduce the number of fake accounts.
Recently, the government has allowed the non-filers to purchase the cars and real estate in the country supporting and promoting them to remain outside of the tax net. It looks like the only solution to uplift the economy and gets rid of the budget deficit is to increase the number of taxpayers by enforcing the digital tax system.