Article Type

Article

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One of the pernicious side-effects of a large dose of the federal divisible tax pool injected into the provincial finances is that the provinces have become slack in mobilizing their own revenues. The provinces contribute only one per cent of GDP to national taxes. Indian state governments contribute 35 per cent to the total tax revenues or 6-7 per cent of GDP. Provinces in Pakistan together spend 40 per cent of the total consolidated expenditures while raising only 10 per cent of total national tax revenues. When flushed with such windfall liquidity, political will, and bureaucratic effort to tap GST on services, property tax and agriculture income tax have been found missing irrespective of the party in power. Our elected leaders consider that imposing and collecting taxes is an unpopular task while their spending needs can be met easily from the federal transfers. They do not feel much pressure to go for digitized cadastral surveys of property; revaluation of existing properties aligning them with market prices; removing exemptions, concessions and discretionary prices fixed by the tax officials; introducing electronic record-keeping and an automatic billing system; updating the record through GIS system mapping, including newly urbanized areas in the tax base.

Publication Source

The News

Publication Date

1-6-2023

Pages

1-4

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