IMF to Recommend Pakistan to Establish National Tax Collection Agency: Report

The visiting team of the International Monetary Fund (IMF) is going to recommend the government to establish a one-stop platform for provincial and federal tax collection, reports claim.

According to an inside source, the IMF team is most likely to recommend the country to introduce a National Tax Collection Agency for timely and effective collection.

When contacted, the chairman of the Federal Board of Revenue (FBR) also confirmed the reports. He agreed that the IMF delegation had discussed the benefits of a harmonized tax collection system in their initial meetings.

He added that they were mulling to implement the suggestion without disturbing the existing arrangement.

A top official source confirmed that the technical team of the global lending agency had sought the data of tax collection before their arrival.

Sharing their thoughts with FBR high-ups before their visit, the IMF officials had said that the country’s fragmented taxation system was the biggest hurdle in policymaking and was also increasing the cost of compliance.

The services sector in Pakistan contributes more than 55 percent to its GDP; however, many services fall under provinces’ domain which hurts the country’s overall revenue collection.

Similarly, the agriculture sector, contributing around 20 percent to the GDP, also comes under the jurisdiction of provinces, IMF technical team added.

“In the next one or two years period, the country will need to move towards the establishment of National Tax Collection Agency where the provinces possessed representations in a bid to harmonize the whole taxation starting from filing to paying due amounts on all taxes under one umbrella,” said an official.

The IMF delegation is here for two weeks. During their prolonged visit, they will call on the representatives of the Ministry of Health, Climate Change, and provincial revenue authorities before their departure. All of the meetings will be held in the federal capital due to non-clearance of security.

The team will finalize its recommendations in a month and will be shared with Pakistan by the end of November.

  • The provincial tax collection is better than the federal one. If they unify it all the rot will spread throughout the system.

  • FBR failed to reach anywhere near target. 14% growth when target is 44%. FBR need a major upgrade. Pakistani Government should give FBR same power as USA has given to IRS

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