ISLAMABAD: Improving tax collection by the provinces is essential to ensure sustainable investment in human resource development in the country, experts agreed.
He is addressing a webinar titled “More Modern, Efficient and Efficient Provincial Sales Tax Towards Government” jointly organized by the Sustainable Development Policy Institute (SDPI) and Sub-National Governance (SNG). Were
Waqar Ahmed, Joint Executive Director, SDPI, said that in order to sustain investment in human development and enable infrastructure development, the revenue of the provinces should increase by about 20-20 per cent per annum in the medium term.
“This goal can be achieved through better tax evasion and evasion data and evidence, and special discussions and use of the construction sector with the private sector,” Ahmed said.
“This dialogue is important to reduce the trust deficit between taxpayers and tax authorities, as well as to improve the overall capacity of tax authorities to use evidence.”
Ahmed added that the provinces face uncertainty over federal transfers and lack of development programs, which threatens the stability of the medium-term financial structure.
“If most efforts are made to mobilize provincial revenue through the epidemic situation, aid and rehabilitation will need to be sustained.”
Claire Hutchings, senior portfolio leader at Oxford Policy Management, said that the incentives of all actors in the system and their motivations need to be understood by the revenue authorities to formulate strategies for tax compliance through new behavioral techniques ۔
Chairman Punjab Revenue Authority Zain Sahi said that the main reason for poor tax compliance in Punjab is high tax rates. “Therefore, in addition to solid technology, financial incentives were also introduced, including reduction in rates,” Sahi said.
Data from outside sources is needed to identify taxpayers outside the tax net, but there is also a need to improve the ability to analyze data in the public sector. The Punjab Revenue Authority is ready to share its data on a mutual basis.
Iram Tauqeer, a public sector expert at the World Bank, said that unless the authorities use taxpayers’ data effectively, remove barriers to the information and communication technology sector and automate the data. It will be difficult to expand the tax base and improve tax compliance.
Usman Khan, SNG Program Innovation Lead, informed the participants that the program works in collaboration with the Punjab Revenue Authority to deploy an intelligent system. It aims to integrate all official data about taxpayers that is commercially available in the public domain.
The UK Government-funded program to improve public financial governance also aims to improve and streamline the audit process for existing taxpayers. He added that the system would use smart data technology to identify audit scope rather than random selection.
Naveed Aziz, Foreign Affairs Adviser to the Commonwealth and the Office of Development, said the FCDO was working with both the federal and provincial governments, but any change needed to be institutionalized.
Galali Khan, Communications and Social Impact Advisor, SNG Program, shared various moves on the subject and highlighted the importance of dialogue on mobilizing tax revenue by the provinces.