ISLAMABAD: Prime Minister Shehbaz Sharif said on Friday the digitization of the country’s tax system was a top government priority to prevent tax evasion worth billions of rupee and meet a challenging tax revenue target of 13 trillion rupees ($46.66 billion) for the new fiscal year that started July 1, a near 40 percent jump from last year. 
The South Asian country has set challenging revenue targets in its annual budget to help it win approval from the IMF for a loan to stave off another economic meltdown, even as domestic anger rises at new taxation measures. 
On Thursday, Pakistan’s tax authority said it has blocked 210,000 SIM cards of users who have not filed tax returns in a bid to widen the revenue bracket. In May, Pakistan signed an agreement with consulting giant McKinsey and Company for the digitalization of its tax system.
Sharif chaired a meeting on Friday to review the reforms process of the Federal Board of Revenue (FBR), instructing it to bring taxable non-filers into the tax net.
“The meeting was told that during the FBR digitization [process], 4.5 million taxable individuals have been identified who were not part of the tax net,” state-run APP reported, adding that over 300,000 people had fixed tax returns within the last few weeks due to new government measures.
“Refunds of 4,000 companies have been stopped during the last two weeks, following the detection of under-invoicing and forged sales tax refunds,” APP said. “The prime minister said that the tax evaders as well as the officers and staffers facilitating them would be punished and vowed not to spare those plundering the public kitty.”
The premier also sought a report on the magnitude of tax evasion and the measures for its prevention.
“He vowed to introduce a taxation system of international standard in the country and called for engaging well reputed professionals and experts for formulation of tax policy.”
Among reforms the IMF is pushing for a new bailout package, like the last two loans, are strengthening public finances including through gradual fiscal consolidation, broadening the existing tax base, improving tax administration, and debt sustainability.
Pakistan is in talks with the lender for a loan of $6 billion to $8 billion, as it seeks to avert a default for an economy growing at the slowest pace in the region.
The rise in the tax target is made up of a 48 percent increase in direct taxes and a 35 percent hike in indirect taxes over revised estimates of the current year. Non-tax revenue, including petroleum levies, is seen increasing by 64 percent.
The tax would increase to 18 percent on textile and leather products as well as mobile phones besides a hike in the tax on capital gains from real estate. Workers will also get hit with more direct tax on income.
Opposition parties, mainly parliamentarians backed by the jailed former Prime Minister Imran Khan, and major trade bodies have rejected the budget and tax measures, calling them highly inflationary.

ISLAMABAD: The United Arab Emirates General Civil Aviation Authority (UAE-GCAA) team has testified aviation security at Pakistan’s northern and southeastern airports of Islamabad and Karachi meets international standards, an official statement said on Friday, after completing its inspection aimed at improving security protocols in the country.

Pakistan’s aviation protocols faced significant scrutiny in 2020 following a scandal where approximately 262 out of 860 active pilots were said to have obtained fake licenses, leading to the grounding of around 150 pilots from Pakistan International Airlines (PIA) and other carriers.

This revelation came in the wake of the tragic crash of PIA Flight 8303 in Karachi, resulting in the suspension of PIA’s operations in the EU and other regions and prompting calls for regulatory reforms to improve safety standards and transparency.

The two-member official delegation from the UAE, led by a senior GCAA director, Abdullah Al Kaabi, arrived in Pakistan last month for a week-long assessment of the two aviation facilities in the country. They visited the federal capital before continuing their visit to the Jinnah International Airport in Karachi.

“Security protocols are in line with international standards and prevailing best practices,” the Pakistan Civil Aviation Authority (PCAA) quoted Al Kaabi as saying. “The visit of the UAE-GCAA team has been completed.”

The statement said the two-member delegation inspected various areas at the airports including passenger and baggage screening apart from the cargo and catering facilities. It added that they also reviewed direct flights coming from the UAE, ground handling and cargo agents of the flight.

The team also examined security access to airports and aircraft security checks. Its members expressed satisfaction with the security protocols and applauded the workings of Airport Security Force, cargo companies and other stakeholders.

The PCAA said the UAE-GCAA visit was the first of its kind, describing it as a continuation of the assessments conducted by the United Kingdom Department of Transport this year.

Pakistan and the UAE enjoy decades-old fraternal relations. Several airlines operate multiple flights per day connecting Pakistan’s major cities such as Karachi, Lahore, Islamabad and Peshawar to the UAE’s Abu Dhabi, Sharjah, and Dubai.