ISLAMABAD - The Islamabad Chamber of Commerce & Industry (ICCI) has called upon the government to take strong measures for reducing tax gap in order to realize the actual tax potential of Pakistan and improve its tax revenue.

In a joint statement issued here on Wednesday, President ICCI Ahmed Hassan Moughal, Senior Vice President Rafat Farid and Vice President Iftikhar Anwar Sethi said that Pakistan has substantial potential to enhance tax revenue without imposing new taxes or increase tax rates, but the only requirement was to take steps to reduce tax gap and create a conducive environment for tax compliance.

The ICCI office bearers that a recent World Bank document titled “Pakistan Revenue Mobilization Project” has pointed out a 50 percent gap between actual and potential tax receipts in Pakistan while Pakistan’s tax revenue potential would reach 26 percent of GDP if tax compliance was to be raised to 75 percent, which was a realistic level of compliance for developing countries like Pakistan.

The President, SVP and VP ICCI said that government has reportedly developed a transformation roadmap for FBR that was a laudable step as the move envisioned to make tax department a semi-autonomous revenue authority with financial, managerial and operational autonomy.

They said that Pakistan’s revenue performance has improved significantly rising from 9.5 per cent of GDP in 2011-13 to 13 per cent in 2017-18, which was appreciable. However, they said that Pakistan could make substantial increase in tax revenue by promoting a tax compliance culture and reducing tax gap.