Originally Posted by sakarim

Promotion of Tax Culture in Pakistan: Perspective, Prospects and Challenges

Introduction
1.tax culture determines economic independence
2.our survival depends in promoting tax culture
3.Pakistanis not a tax paying Nation
4.provision of public amenities (education, health, employment, standard of life) depends on tax culture

A. There is a Dire Need to Promote Tax Culture because:

1.tax to GDP ratio - one of the worst in the world
2.our expenditures way more than our earnings
3.tax potential of our economy is immense
4.it will assist in documenting economy
5.it will determine economic soundness
6.tax evasion and tax avoidance on the rise
7.lessen the dependence on foreign aid/grants
8.finance projects ( energy, education, infrastructure, health, agriculture etc)
9.to raise the standard of livings i.e. availability of Public utilities

B. Tax Culture so far Not Promoted because:
1.lack of political will
2.Habitual in meeting ends through borrowing
3.Inefficiencies of Federal Board of Revenue (FBR)
4.Political involvement in FBR/ not independent
5.to protect interests of the business community/traders -SRO culture
6.Never been a priority for the governments in Pakistan
7.Finance ministry not taking effective measures
8.Tax laws are amended frequently
9.people are usually reluctant to pay taxes

C. Strategies to Promote Tax Culture:
1.Introduction of Withholding Tax Regime
2.Promotion of Amnesty Schemes
3.Use of Information Technology - facilitating the public
4.Use of Electronic Media in promoting tax culture
5.Facilitation and Tax Payer Education (FATE) wing of FBR
6.Broadening of Tax Base (BTB) Unit of FBR

D. Tax Culture Outlook so far:
1.Income Tax Ordinance of 2001 -Universal Self Assessment Scheme : Functional Basis (Assessment, Audit, Withholding, BTB)
2.Taxation via Circle Based System - Income Tax Ordinance of 1979

E. Challenges in Promoting Tax Culture:
1.Taxation itself a complex phenomenon
2.Documentation of Economy a daunting task
3.Ownership of the file is all gone - taxation via functional basis
4.Human Resource of FBR not developed
5. Facilitation and Tax Payers Education (FATE) wing of FBR is inefficient
6.Absence of Tax Police i.e. weak enforcement
7.loopholes in tax laws leading to tax evasion and tax avoidance
8.Public unaware of tax laws : illiteracy and ignorance
9.Priorities of the government altogether different
10.Weak infrastructure and other resource constraints of FBR
11.Finance ministry not exerting to its potential - political involvement

F. The Case of Scandinavian Countries:
1.Lessons to be learnt - High tax to GDP ratios and standard of life

Conclusion:
1.Economic Independence: Panacea of our ills