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    Business and Lobor Law

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    zohaibsikandar
    The document discusses taxation in Pakistan, noting that Pakistan has a very low tax-to-GDP ratio which leads to fiscal deficits that require borrowing from international financial institutions. It analyzes reasons for Pakistan's low tax collection such as weaknesses in the tax collection system, lack of taxation of large sectors like agriculture, and lack of public awareness about tax laws. Potential solutions proposed include improving honesty in tax collection and payment, conducting public awareness campaigns about the importance of taxes, and leveraging technology to modernize the tax system.

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    Business and Lobor Law

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    zohaibsikandar
    33 views4 pages
    The document discusses taxation in Pakistan, noting that Pakistan has a very low tax-to-GDP ratio which leads to fiscal deficits that require borrowing from international financial institutions. It analyzes reasons for Pakistan's low tax collection such as weaknesses in the tax collection system, lack of taxation of large sectors like agriculture, and lack of public awareness about tax laws. Potential solutions proposed include improving honesty in tax collection and payment, conducting public awareness campaigns about the importance of taxes, and leveraging technology to modernize the tax system.

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    The document discusses taxation in Pakistan, noting that Pakistan has a very low tax-to-GDP ratio which leads to fiscal deficits that require borrowing from international financial institutions. It analyzes reasons for Pakistan's low tax collection such as weaknesses in the tax collection system, lack of taxation of large sectors like agriculture, and lack of public awareness about tax laws. Potential solutions proposed include improving honesty in tax collection and payment, conducting public awareness campaigns about the importance of taxes, and leveraging technology to modernize the tax system.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    33 views4 pages

    Business and Lobor Law

    Uploaded by

    zohaibsikandar
    The document discusses taxation in Pakistan, noting that Pakistan has a very low tax-to-GDP ratio which leads to fiscal deficits that require borrowing from international financial institutions. It analyzes reasons for Pakistan's low tax collection such as weaknesses in the tax collection system, lack of taxation of large sectors like agriculture, and lack of public awareness about tax laws. Potential solutions proposed include improving honesty in tax collection and payment, conducting public awareness campaigns about the importance of taxes, and leveraging technology to modernize the tax system.

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    Business and labour law

    Term Report
    Tax payment, revenue collection and economic progress
    What is Tax?
    According to Professor Dalton
    “A tax is a compulsory contribution imposed by a public authority
    irreespective of the exact amount of service rendered to the tax-payment
    in return and not imposed as a panelty for any legal offence”.
    It means that tax collected by the government is not an offence or any legal
    punishment. Tax collection is basically revenue collection for the
    government. The tax collected from businesses and individuals is termed as
    revenue which is spent on different public projects for example building of
    roads; dams’ etc.Every government has its own board that collects tax from
    individuals and businesses.

    The link between government taxes and Economis progress


    Fiscal Policy: -Fiscal policy refers to the government policy regarding the
    collection of taxes and expanditure on public or government projects.
    Government expenditure include
     Salaries of government officials
     Salaries of Law inforcemant agencies
     Purchase of goods from other countries example Tanks, Aircrafts
    Computers, etc.
    To cover those expanditure government sets its target of tax collection
    from its public. If that target does not meet the expandire done by the
    government the government borrows the defecit amount from either
    central bank or other International Financial institutions like IMF
    (International Monetory Fund).This is also Known as deficit financing.
    Review on tax collection in Pakistan
    Introduction: -
    Federal Board of Revenue” means the Federal Board
    Of Revenue, established under the Federal Board of
    Revenue Act, 2007

    In the body which is responsible for collecting tax from individual


    households and business in Federal Board of Revenue (FBR) which was
    formally known as Central Board of Revenue. The Central Board of Revenue
    (CBR) was created on April 01, 1924 through enactment of the CBR Act,
    1924. In 1944, a full-fledged Revenue Division was created under the
    Ministry of Finance. After independence, this arrangement continued up to
    31st August 1960 when on the recommendations of the Administrative Re-
    organization committee, CBR was made an attached department of the
    Ministry of Finance. In 1974, further changes were made to streamline its
    functions. Consequently, the post of Chairman CBR was created with the
    status of ex-officio Additional Secretary and Secretary Finance was relieved
    of his duties as ex-officio Chairman of the CBR. Its name was changed from
    Central Board of Revenue to Federal Board of Revenue in July 2007
    The problem with Pakistan
    The real problem with Pakistan is that tax to GDP ratio is very low. Due to
    this reason our government faces fiscal deficits.To counter those deficits
    the government have to borrow money from differnet monetory
    institutions like IMF, World Bank or Asian development bank. Due to this
    reason Pakistan has become debtor of many different orgnizations. The
    foreign debt is increasing with increasing day by day. Following are the
    reason for this problem
    1. The tax collecting system: - The collecting system was restructured in
    2007 but still it is not working as it should be. Alot of individuals are
    taxed due to their political influence. Agriculture which is one of the
    biggest sectors of our economy is not taxed. Agriculture sector
    contribute 23% in the GDP (Gross Domestic Product). It is a huge
    chunk of income which is not taxed. Only agriculture raw material is
    taxed which is not adequate. Businessmen also take advantage of
    this system they also try their leve best to evade taxes. They use to
    bribe the tax collecting officer. Sometimes if a Businessman tries to
    give the rightful amount of tax and gives nothing to the tax collecting
    officer he also finds him self in trouble. Even in an ordinary general
    stores the shopkeeper doesn’t makes the cash memo or keeps a
    written record of its transaction (This is done to evade taxes.)

    2. Awarness: - There is also a lack of awarness in our country In Pakistan


    many individuals are not aware about the rules and regualtion about
    tax payment and recovery. For this purpose FBR have creatd their
    own websit from where you can easily download rules and
    regulations about tax payment. (The website is www.fbr.gov.pk ). In
    cities this people are aware of some essential rules and regulations
    but in our rural areas there is almost very little awareness about tax
    payment.
    Solution of Pakistan’s Tax problem
    “Honesty is the best policy”
    In 2006-2007 the tax revenue was Rs. 847.2 billion which was too low as
    compared to our GDP in the same fiscal year. The solution to this deficit is
    that not only the government has to show honesty but also the individuals
    also have to be honest as well in paying tax. The tax collectors must do
    justice with their profession and the citizens of Pakistan to their state.
    Those officials must be unmasked who are wrongfully using this revenue
    collected by FBR
    “Media campaign”
    Government must start a media campaign to make people aware of tax and
    revenue collection and its connection with the economic progress. This is
    compulsory because many people are not informed about types of taxes
    and their use in developing infrastructure and providing services
    “Use of technology”
    Government must use technology to their advantage. They must install
    ATM like machines in Banks,

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