The Federal Board of Revenue (FBR) has requested the federal government to provide more staff and resources to bridge the Rs. 7 trillion tax gap.
Tax gap is the portion of tax revenue which remains unpaid. This gap in tax revenue is attributed to tax evasion and avoidance practices. The tax loss incurred due to noncompliance is ultimately shifted to those who pay taxes.
Sources said that the FBR has requested the government to enhance its manpower and logistical resources to crackdown against tax evasion.
Sources within FBR say that compared to neighboring India, Pakistan spends very little on its tax machinery.
As per details, FBR receives Rs. 1 in funding for collection of Rs. 200 which is much less than the ration in India. FBR also highlighted that provincial revenue boards have much higher budgets.
FBR officials also claimed that the tax department has only a handful of vehicles to monitor key sectors such as sugar, cement, tobacco and fertilizer.