Karachi, May 10, 2012 (PPI-OT): The World Bank (WB), in its report “Country partnership strategy progress report 2010-2014”, has stated that Pakistan has been facing a severe setback in meeting budgetary revenue targets and the gap between revenue and expenditure also called the fiscal deficit is widening at a fast pace. Over the years, contribution from income and sales tax collection in total revenues is on a rising trend while taxes from trade and excise duties have been on a continuous decline. WB’s report emphasized on the immense need of revenue mobilization strategies in Pakistan by bringing proper taxation policies and systems while also broadening the tax base. The WB also proposed few of the strategies to be conveyed to taxation authorities, which are:
• Imposition of Reformed General Sales Tax (RGST) regime on goods and services.
• Implement provincial tax reforms.
• Adapt a two-tier structure for individual income tax and withholding tax.
• Reformation of Federal excise tax.
• Implementing a business friendly corporate income tax.
• Providing a simplified structure of customs duties.
Lastly, the WB suggested that the lending body would continue to provide its support to tax administration bodies in Pakistan based on their improved performance.