Why is tax payment so important?

The money that is gathered will be placed in the national treasury if the revenue collecting personnel is to distribute them. This explains why industrialized nations have highly stringent tax rules. Everybody pays taxes, from the President to the average person, and tax evasion is a serious offense. It is the reverse case in Pakistan.

Tax avoidance is now a national problem. Reluctant to pay taxes are industrialists, landowners, vaders, and mill owners seated in the houses of power, aside from common merchants. 6.15 million taxpayers have filed tax returns as of December 31, according to FBR Member Policy IR Dr. Hamid Atiq Sarwar, who briefed the media at the FBR headquarters. Beyond 100,000 exist. The tax return deadline has been extended by one month since another 6 lakh persons still need to file reports. That is, just 2.75 million individuals are now on the active tax payer list in a nation with 22 crores of people. Several of them work for the government. This is the reason it is never shown to be accurate to estimate revenues while creating the yearly budget in Pakstab. One never reaches the tax collection goals established. Millions of people in the nation lead opulent lives in large cities, however they are not subject to taxes and do not have a National Tax Number.

The future of Pakistan is at jeopardy since it cannot satisfy the demands of its expanding population without raising tax revenue. The reason all the services are affordable for the people is that, according to the Federal Board of Revenue, the tax payer rate in Pakistan is less than 4% while in industrialized countries it is more than ninety percent. While most nations with GDPs comparable to Pakistan's have tax-to-GDP ratios of no less than 14 percent, Pakistan's is about 9 percent. Pakistan will keep to rely on debt unless it diversifies its sources of income. It will have to ask for assistance from other countries or keep charging higher interest in order to pay the interest installments. 

Currently, Pakistan owes more than 100 billion dollars abroad, which essentially means that 60 percent of its income is used to pay off debt and interest. Pakistan could use this enormous sum of money to improve education, health, and the nation's infrastructure on contemporary lines as well as to raise the income of its citizens if it did not have to spend it on debt repayment. Relief can arrive in their life.

The wealthy and influential classes of Pakistan can lead by example if they pay their taxes honestly. These folks' tax payments can also help to clear the negative image of tax collectors who, rather than collecting the whole amount, compromise with tax evaders. It is unfortunate that those who ought to be an inspiration to others are themselves entangled in corruption.

Knowing full well that the nation's tax collections are pitiful, the administration pledged in its election platform to raise taxes to 15% of GDP. Though the Pakistani people are coming up with reasons not to pay taxes and causing issues for the government, the economic team is also working very hard for this. The strong forces obstruct the reforms they wish to implement.

People should remember that the situation of the people will not get better unless tax receipts rise as desired. The elite of Pakistan lead opulent lives while paying either very little or no taxes. Some times, they purchase pricey goods from business centers without using their NTN. For this reason, the government has not yet implemented the requirement of obtaining an ID card for purchases above $50,000. Tax revenue is seriously shortfalling the government.  Without the honest tax payment by the people, the kind of crisis Pakistan is currently facing cannot be fixed. Others own money as well, but they do not proceed to evade taxes.

The tax system has to be improved, and that will need boosting public confidence. People will not pay taxes till they have faith in the government restored. The public must be informed that the tax they are paying is going toward national development initiatives by the government making the tax system clear and easy to understand.