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Pakistan govt considering proposal to lower tax rates

ISLAMABAD — Pakistan government is considering a proposal to lower tax rates in order to broadening the existing weak tax net as well as to reducing incentives for corruption. The objective is also to help increase incentives for joining the formal sector.

The proposal has been made by the ministry of commerce aimed at sorting out "regulatory issues in domestic commerce".

In its latest study "The state of domestic commerce in Pakistan", the copy of which was also made available to this correspondent, the ministry also called for having continued focus on rationalising the income tax structure.

It said that the introduction of self assessment scheme has helped in lowering compliance costs and corruption costs. Also sales tax regime requires significant work besides the rationalisation tax rate.

Similarly, the ministry of commerce is of the view that sales tax chain needs full documentation and compliance procedures need to be streamlined. The zero rating of textile to get rid of a major portion of the refund game was a big positive step.