A growing of an Indirect Tax system in Pakistan day by day to reduce international debt

burden by the government, so what you contribute that how can be reduce indirect taxes
by the public? Give essential strategies on this issue?
Pakistans tax regime consists of four main revenue sources: GST, CED, Customs Duty and
Income Tax. Its structure is dominated heavily by indirect taxes, which combines over two-third
(68 per cent) of combined federal and provincial tax receipts.
Another report stated that if surcharges are included, the indirect taxes rise to over three-fourth
(76 per cent). Thus all of these indirect taxes badly affect the poor of the country.
Other hurdles include unwillingness of the affluent to pay their dues, the token contribution to
tax revenue by the countrys parliamentarians, barring a handful, widespread exemptions and
privileges granted to the rich and powerful, many of which have been coded into law, a rising tax
burden on honest taxpayers and formal businesses and the growing inability of government to
finance the delivery of efficient and effective public services to a burgeoning population.
Former FBR chairman Abdullah said that Pakistan has one of the lowest tax collection rates in
the world and the international organisations are watching its efforts closely. They want Pakistan
to do more to tackle rampant tax evasion, particularly by its wealthy elite. He said that for
sustainable development we must rely on direct taxation instead of indirect taxation which
creates woes to marginalised classes of the country.
Sustainable Policy Institute Deputy Executive Director Dr Vaqar Ahmed said that as part of the
7th National Finance Commission (NFC) Award, all the four provinces were supposed to
improve tax collection, but they fell behind their commitment to collect tax on farm income and
real estate to improve the countrys falling tax-to-GDP ratio.
It was agreed in the award that all the provinces will supplement centres efforts to increase the
tax-to-GDP ratio to 13.60 per cent by 2012-13, but it actually ended up at 9.6 per cent for the
same year, showing a dismal performance of the revenue realisation. Thus to rationalise the
indirect taxation the provinces should have to move for direct tax collection on agriculture, on
landlords, and on property owners.