Every Pakistani evaded 4,800-rupee tax in 2007-08: World Bank

Islamabad, Sep. 6 (ANI): A new World Bank report has revealed that every Pakistani citizen evaded paying the tax amount of 4800 rupees in the financial year 2007-08. The total tax evaded in the period stood at 796 billion rupees.

According to the WB's Pakistan Tax Policy Report 2009, a large tax gap in the country suggested that the tax system was likely to underperform in terms of revenue, efficiency, equity and administration.

The federal tax gap in Pakistan for 2007-2008 estimated in the report is around 79 percent of the actual tax receipts, the Daily Times reports.

"There is a broader consensus that the country's tax system under performed as it had a narrow base, with taxes being levied on a limited number of sectors, businesses and individuals," the report said.

The World Bank fears that once the fiscal pressure begins to ease, tax reform pushback would be in full swing.

"Even modest reform proposals to curb tax exemptions and tax evasion will come under fire and the government will be subject to pressure to back down and return to business as usual," it said.

Such meagre revenue would leave the government with little options to cover its targeted expenditure, which in turn would make it impossible to maintain social and infrastructure sector-spending at the level required for development, the report noted. (ANI)