LAHORE: President Dr. Arif Alvi said on Thursday that reforms in the tax system were crucial for economic development of the country. Addressing an awareness seminar on tax system here at Governor’s House, he said that tax-to-GDP ratio was very low in Pakistan which needed to be enhanced by restoring the confidence of taxpayers and facilitating people through the institution of Federal Tax Ombudsman. In the past, a specific class evaded taxes through offshore companies and the money made through tax evasion was transferred to Swiss banks and Europe.
These illegal practices put the country under heavy debt burden, he regretted. Contrary to this, he said that every citizen pays taxes in developed countries. The president said that Imran Khan is the first prime minister who is making solid efforts to curb tax evasion and money laundering, adding that accountability is vital for a positive change in the system. In the Islamic history, the Khulfa-e-Rashideen [Rightly Guided Caliphs] presented themselves for accountability. He promised that maximum facilities would be provided to taxpayers.
Dr Arif Alvi said that tax collection system was backbone of any country’s economy. “We need to create an atmosphere of trust in order to collect taxes from people. In this regard, the Federal Ombudsman and the FBR (Federal Board of Revenue) should put in joint efforts and play a key role in gaining people’s trust and curbing corruption.”
The president said that use of modern technology was unavoidable in today’s world. It is a fact that people are reluctant to join tax net due to cumbersome documentation process in the institutions and they think that if they join the tax net, they will unnecessarily be bothered. This fear needs to be allayed, which will require institutional reforms. He added that in developed countries, people do not have to travel to offices to get loans, join the tax net and pay taxes; that is why they pay taxes honestly. “We also have to adopt this model and convince people that their taxes will be spent for development of the country.
President Dr. Arif Alvi said that tax evasion affects the national economy. He said that in order to bring a positive change in the country, every citizen will have to pay taxes with a sense of responsibility. He said that delay in government work promotes bribery which increases corruption. He mentioned that file work is done on daily basis and on merit in the Presidency. Earlier, Federal Tax Ombudsman Dr. Asif Jah delivered a welcome address and said that on the special instructions of the government, the complaints of the taxpayers are resolved within 60 days so that people have confidence in the institution.
