World Bank calls for bringing services sector into tax net

Tax experts of World Bank (WB) have asked the government to bring the services sector into the tax net for raising the tax-to-GDP ratio.
Official sources told Business Recorder on Wednesday that WB experts have submitted the preliminary study on the existing system to raise the tax-to-GDP ratio to Prime Minister's Advisor on Finance and Central Board of Revenue (CBR). The presentation focused on broadening of the tax base.
The WB would submit a detailed report on budgetary measures to the tax officials before the announcement of the 2006-20 budget.
They said that one of the measures suggested to broaden the tax base is to bring the services sector into the tax net. The final WB report would mainly take into account policy measures needed to raise the tax-to-GDP ratio.
According to WB, Pakistan's tax-to-GDP ratio remained low as compared to other developing countries. The tax-to-GDP ratio recorded some improvements during the period 2001-04 reaching 11.6 percent of GDP, but fell again to 9.6 percent in fiscal year 2004-05.
Officials added that WB experts have been given exclusive assignment to suggest measures to raise tax-to-GDP ratio in Pakistan.