Revolutionizing Taxation: TPAP submitted Income Tax Proposals 2024-25 for Reduced and Uniform Tax Rates ensuing a Fairer and Simpler Tax System

Tax Payers Alliance Pakistan (TPAP), an initiative of economic think tank PRIME, submitted budgetary proposal to the Revenue Division/Federal Board of Revenue (FBR) in Pakistan, aimed at reforming the income tax system to promote simplicity, transparency, and compliance. The proposal generated in response to the FBR’s solicitation of ideas for the upcoming Finance Bill 2024.

The proposal was developed by TPAP Team: Mr. Anas Farhan, Vice President ZTBL & PRIME Research Fellow from Islamabad, Mr. Usman Azmat, Advocate High Court from Lahore and Ms. Sehrish Naz, Economic Analyst FPCCI from Karachi, in consultation with the TPAP’s members comprising of a group of tax experts from across Pakistan, including representatives of Salaried Class Alliance (SCA) Mr. Shameer Muhammad Haroon, Member ICAP and Mr. Amer Sharif, Assistant Manager Treasury KAPCO. Subject proposal is aimed at simplifying tax regulations and reducing the compliance burden on taxpayers. The focus of the proposed tax reforms is to eliminate taxes that are unjustified, discriminatory, do not contribute to the national exchequer, and have become redundant. This proposal aims to create a fairer and more efficient tax system in Pakistan that can provide sustainable funding for public expenditures.

The proposed reforms are imperative for the promotion of compliance and broadening of the tax base. The prevalent ambiguities, complexities and distortions from discriminatory application of taxes are the underlying reasons for suboptimal performance of tax administration and low revenue collection. The government needs to move away from regressive and discriminatory tax regime towards flat, low rate and predictable taxes for transparency, compliance and broadening of tax base.

TPAP’s proposal emphasizes the significance of streamlining the tax system and lessening the compliance burden on taxpayers. They argued that a flat and low-rate taxation system would accomplish these objectives while also promoting economic growth and reducing inequality. The proposal would eliminate the current complex system of tax brackets and exemptions, reducing the need for expensive tax planning and compliance.

Overall, TPAP’s proposal is a crucial contribution to the ongoing debate on tax reform in Pakistan. It provides a well-argued and clear case for a simpler, fairer, and more efficient tax system that could benefit both taxpayers and the wider economy initiative.