Nowadays Pakistan faces few long run financial challenges. The current economic situation serves a few opportunities to Pakistan. Lower investment and income taxation are some of the financial issues. Revenue taxation has constantly been a difficulty that Pakistan’s economy faces. Since the previous four years, Pakistan faced about 81 percent increase in income tax. This increasing ratio is basically a big challenge and seems also like a big plus. In 2017, budget showed a 5.4 percent of growth in overall GDP that is actually a far above over in centuries. Pakistan now allowed FBR (federal Board of Revenue) to start working as an independent, accountable and professional tax management. This action will encourage assurance to tax payers in FBR, which also enhances tax collection in a reasonable way. Therefore, when there is a higher number of finance accessible, there are higher chances to allotment and contribution in the development of infrastructure that is roads, water, telecommunication and sewerage.

The whole process can also decrease the unemployment rate and can create jobs, and income. Not only this, it can also produce overall economic activities. Merely 1.21 million people pay income tax as per the stats. That makes it below 1% of the total population. According to the annual report that the State bank of Pakistan has shared, there are 57.5 million people who are employed and earning but are not taking part in economic sharing. This is the main reason why tax payers are not taking part and the tax figure is unbalanced. Central bank of Pakistan stated in the annual report that in 5 years there was an 11.6 percent increase in the year of 2016 whereas GDP ratio was 9.3 percent lower in the year 201 l.In addition to this, Pakistan’s entire population is about 200 million and as per the shared result only 29% of the population is taking part and paying taxes.

A country faces low-level equilibrium when the side of revenue is low and government has no plan to enhance taxation. Hence, the result could be either decrease in expenses in order to balance revenues or, borrow in the form of debts. Over from last five years the trend shows that resources shortfall target is 4.2% of gross domestic product that is also accepted by the parliament but the current impractical rate in the third quarter is 4.9%.

Economic survey revealed that in Pakistan 61.4% people are working and making around 122 million and these all are fall in the category of working population. From which 48% that is 57.5 million are tax payers. The current economic report of 2017-2018 has recorded $l2billion of shortfall in financial budget.

Tax revenues are recorded in the first nine months of the fiscal year and the amount is billion 2627 rupees as compared to the previous year report. There is a rise of about 15.8 percent entirely. Due to the increase in expenses, there are the chances of getting back to IMF for the rescue package because Pakistan is still near to the ground on Human Development.

ZOHA IMTIAZ,

Lahore, December 22.