TAXATION SYSTEM IN PAKISTAN

GROUP MEMBERS
   

FARYAL GULNAZ AZRA NOUREEN

CONTENTS
       

TAX & TAXATION SYSTEM PROBLEMS FACED BY TAX SYSTEM CATEGORIZATION OF TAXATION SYSTEM ADMINISTRATION OF TAXES TAX POLICY AND ITS ADMINISTRATION WINDS OF CHANGE CBR AND TAXATION SYSTEM SUGGETIONS

TAX
To Impose A Financial Charge Upon A Tax Payer By A State Such That Failure To Pay Is Punishable By Law.

PROBLEMS FACED BY TAX SYSTEM

There Are Some Major Problems Faced By The Taxation System In Pakistan: 1)Tax Illiteracy 2)Complexity of the Tax Code 3) Warding off Foreign Dictation 4) Mis -declaration of Income

CATEGORIZATION OF TAXATION SYSTEM

Taxation System In The World Are Classified Into Two Categories: 1.Direct Taxes 2.Indirect Taxes

DIRECT TAXES
A Government Levy On The Income, Property, Or Wealth Of People Or Companies. A Direct Tax Is Borne Entirely By The Entity That Pays It, And Cannot Be Passed On To Another Entity.

INDIRECT TAXES
Charge levied by the State On Consumption, Expenditure, Privilege Or Right But Not On Income Or Property.

ADMINISTRATION OF TAXES
Administration Of Taxes Can Be Done Through: 1:Direct Tax 2:Personal Tax 3:Tax On Companies 4:Inter Corporate Dividend Tax 5:Unilateral Relief 6:Customs 7:Central Excise 8:Sales Tax

DIRECT TAX
Direct Taxes Primarily Comprise Income tax, Along With Supplementary Role Of Wealth Tax.

PERSONAL TAX
It Comprises Of Taxes Collected From All Individuals, Unregistered Firms And Association Of Persons

TAX ON COMPANIES
All Public Companies Other Than Banking Companies Incorporated In Pakistan Are Assessed For This Tax.

INTER-CORPORATE DIVIDEND TAX

It Is The Tax On The Dividends Received By A Public Company From A company Owned By Government.

CUSTOMS
Goods Imported And Exported From Pakistan Are Liable To Rates Of Customs Duties As Prescribed In Pakistan Custom Tariffs.

CENTRAL EXCISE
Central Excise Duties Are Leviable On A Limited Number Of Goods Produced Or Manufactured, And Services Provided Or Rendered In Pakistan.

SALES TAX
Sales Tax Is Levied At Various Stages Of Economic Activity On: *All Goods Imported Into Pakistan *All Supplies Made In Pakistan

UNILATERAL RELIEF
A Person Resident In Pakistan Is Entitled To This Relief In Tax On Any Income Earned Abroad.

TAX POLICY AND ITS ADMINISTRATION



Major Emphasis Of Tax Policy During 1970`s & 1980`s Was On Increasing Tax Rates Extremely High Corporate Rates, Discrimination Between Different Types Of Corporations Seriously Regressive Sales Tax Structure.

WINDS OF CHANGE
Somewhere In 1980`s There Was A Realization That The Tax System Needs Restructuring And Reforms .Since Then, Different Tasks Forces And Research Groups Were Constituted And Their Contribution Has Resulted Into Some Valuable Studies.

SOME IMPORTANT REPORTS



 

Report By The National Taxation Reform Commission (1986) Reports By The Resource Mobilization And Tax Reforms Commissions (1994) Report On Income Tax Reforms (2001) Tax Policy In Pakistan , An Assessment Of Major Taxes And Options For Reforms(2008)

CBR AND TAXATION SYSTEM



The Central Board of Revenue (CBR) has made a Task Force on improving taxation structure.

GOALS OF CBR
 

  

The Prime Goals Are: To Broaden Tax Base Apart From Increased Revenue Collection Educated Tax Payer Improved Tax GDP Ratio Improve Tax System And Decrease Parallel Size Of Economy

FAILURE OF CBR
 

Corruption Mis Conception About Tax Evasion And Tax Avoidance Legislative Loopholes

SUGGETIONS FOR EFFICIENCY

    

Broadening The Base Of Tax Paying Population Rampant Corruption In The Tax Administration Decrease Of Mistrust And Misgivings About Use Of Tax Money Restoration of the Self esteem of the Taxpayer Advertising