Only 3pc businesses, industry paid taxes in 2007

Dawn “reports the taxation percentage every year”:http://www.thenews.com.pk/daily_detail.asp?id=94582, and each time its shocking:

bq. Out of the 45,000 industrial and commercial units registered in Pakistan, **only 1,352 major units contributed 94.1 per cent of the total tax collection this year**, says the Federal Board of Revenue.

p. That is pretty amazing.They might as well not bother collecting taxes from anyone outside these super tax paying 1,352 companies. All the FBR needs is 1352 employees, one for each company, and a couple of outside auditors.

Billions would be saved by firing the tens of thousands of redundant staff, and without having to deal with the tax bogeyman entrepreneurship and small business in Pakistan would soar.


bq. “This is most alarming situation for the economy that slumps in the tide of rising terror that disrupts the growth and even the operation of trade and industry, leading to downswing in tax collection by 23 per cent in June-January period of 2007-08 (current fiscal year),” said a senior official.

Doom and gloom all around.

bq. Last year, the collection stood at Rs 841.4 billion, and if the FBR collects Rs 850 billion this year, the net improvement would be that of Rs 8.6 billion, never so low in the history of tax collection in Pakistan.

850 billion Rupees divided by 165 million people means every person in Pakistan pays about 5,150 rupees in tax a year on average.

bq. The Tax Collectors Conference that was held here Tuesday-Wednesday, “noted with satisfaction that a healthy growth has been achieved in sales tax collection in all major sectors, except electricity, sugar and cement sectors,” the FBR officially concedes.

We have such high demand for electricity that the supply is all sold out twice over, and still they can’t pay their taxes! Same with sugar – prices skyrocketed this year, so you’d expect more taxation revenue, but in the twisted economic situation we have here, more revenue equals less taxes collected. The cement industry is another one which is undergoing a super boom, with cement hitting record prices, so once again this is very strange.

Economics just doesn’t work like it does in the textbooks, over here.

One thought on “Only 3pc businesses, industry paid taxes in 2007”

  1. Mostly industrilist in Pakistan belongs to some political party. and in the last and present care taking government, corruption is very high. Obviously, revenue will be submitted to some other source not toe CBR. CBR employeed very high no of employees. What pakistan will get from revenue?

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