The collection of tax revenue, like any other country in the world is a matter of concern for Pakistan. The tax revenue helps governments finance their expenditures and it also reflects the level of trust, the people of the country have on their government. In Pakistan the collection of tax revenue is quite low, and very few people fall into the tax net. A reason for this low revenue collection, is the complex tax mechanism of Pakistan, with a lot of variations between the provincial and federal tax rates, which makes it difficult for the tax-payer to file taxes. Some other reasons include a bureaucracy fueled with corruption, where one can get away from paying taxes by bribing officials or by pulling strings , and also the high tax rates which further discourages the people from paying taxes.
Whenever there is a discussion on the burden of taxes on the common man in Pakistan, the FBR issues the amount of revenue collected from taxes, the number of taxes levied and the rate of taxes. This information is then used by the government and the opposition political parties to depict the tax mechanism in Pakistan. It is generally assumed that higher tax rates would suggest a larger of burden of taxes on the public and vice-versa. However there are certain other factors which this approach excludes while calculating the burden of tax .
Islamabad, January 3.