World Bank suggests taxes on agriculture, real estate and retail sectors to infuse Rs 3 trillion in Pakistan, say reports
The World Bank has suggested closing all tax exemptions and bringing agriculture, retail, and real estate under a tax bracket that can fetch three per cent of GDP in the cash-strapped Pakistan's kitty, media reports said on Tuesday.
“The people in two major areas in the provincial jurisdiction — real estate and agriculture — had most of the untaxed wealth, which should be taxed by the provincial governments to be able to improve services and reduce the financial burden on the centre, which was financing these services,” newspaper Dawn quoted WB's Country Director Najy Benhassine and senior economist Tobias Haque as saying.
The lender has projected that if agriculture income and properties tax is enforced properly then it could fetch three per cent of GDP in the tax collection on an annual basis, equivalent to slightly over Rs 3 trillion, the Dawn newspaper quoted Haque as saying.
He said real estate and agriculture should yield revenue of two per cent and one per cent, respectively, of the GDP (or about Rs 2.1 trillion and Rs 1 trillion, respectively, according to official GDP size).
Referring to a detailed policy paper that the World Bank has submitted to the Pakistan government, Haque said, the paper “advocates increasing revenues through improved, expanded and progressive agriculture income taxation.”
“This should be done immediately to reduce or refine the current 12.5-acre tax exemption threshold to bring more agricultural land into the tax net and ensure appropriate categorisation of land on the basis of size, location, irrigation status and area-based productivity aspects into tax rates,” the World Bank official was quoted as saying.
Newspaper The News International said the World Bank is also expecting the
