ISLAMABAD: Pakistan’s tax return filers have increased from almost 1.6 million last year to 3.2 million as of now, Finance Minister Muhammad Aurangzeb said on Sunday, stressing the importance of structural reforms to ensure Islamabad moves toward sustainable growth.
Pakistan’s public debt of $242 billion remains a huge problem for the South Asian country and servicing it may swallow up half of the country’s income in 2024, according to the International Monetary Fund (IMF).
The global lender formally approved a $7 billion loan program for Pakistan which will help the country shore up its foreign reserves. One of the key demands by the IMF in return for the loan was for Pakistan to widen its chronically low tax base.
Pakistan aims to collect an ambitious $46 billion through taxes this financial year. Authorities have identified 4.9 million taxable persons in the country by using modern technology.
“There were 1.6 million filers till this time last year. This has, to date, doubled,” Aurangzeb told reporters at a press conference. “We are now close to 3.2 million filers.”
The minister said last year Pakistan had recorded at least 300,000 new tax filers while this year, the figure has swelled to 723,000 new filers.
He credited the government for “walking the talk” and implementing tough economic reforms, especially those related to taxes.
Sharif’s government has used unusual methods, including blocking 210,000 mobile connections, to compel people to file their tax returns. Islamabad also aims to reduce its fiscal deficit by 1.5 percent to 5.9 percent in the coming year.
The finance minister warned that non-filers will be deprived of certain facilities to encourage them to become part of the tax net.
“Non-filers will not be able to buy vehicles, won’t be able to buy properties, won’t be able to [access] current bank accounts and mutual funds and will face a lot of problems with cash deposits and withdrawals,” Aurangzeb said.
The minister said Pakistan has 300,000 manufacturers out of which only 14 percent are registered and 300,000 wholesalers out of which only 25 percent are registered with tax authorities for the purposes of paying sales tax.
He said going forward, the government will only allow manufacturers to sell to registered wholesalers only, warning that the government will be forced to block utilities and seal the premises of those who are not registered with tax authorities.
