The development comes as Dar chaired a meeting on the FBR's revenue performance at the Finance Division on Tuesday.
According to a statement released by the Ministry of Finance, FBR Chairman Asim Ahmad gave a detailed presentation on the revenue targets and performance for the period July 2022 to March 2023.
The statement said that the FBR had expressed its commitment to meeting its targets in the remaining months of the financial year.
Dar expressed satisfaction with the FBR's performance and extended his full support to help it perform its revenue collection duties. He also maintained that the FBR team needed to enhance efforts to unlock the country's true tax potential.
SAPM on Finance Tariq Bajwa, SAPM on Revenue Tariq Mehmood Pasha, Chairman FBR, and other senior officers from the Finance Division and FBR attended the meeting.
Pakistan's Economic Challenges and the Role of Taxes
Pakistan is currently facing a number of economic challenges, including a low tax-to-GDP ratio. As per data provided by the country's Ministry of Finance, Pakistan's tax-to-GDP ratio dropped by 0.4% in the first half (July-December) of the current fiscal year to 4.4% from 4.8% of the same period last year.
This low tax-to-GDP ratio is a major obstacle to Pakistan's economic development. Taxes are a key source of government revenue, and a low tax-to-GDP ratio means that the government has less money to invest in public services, infrastructure, and economic development.
There are a number of reasons for Pakistan's low tax-to-GDP ratio. One reason is that the country has a large informal economy, in which businesses and individuals operate outside of the formal tax system. Another reason is that Pakistan's tax laws are complex and difficult to comply with.
The government has taken a number of steps to try to increase tax revenue. In recent years, the government has introduced a number of new taxes, including a tax on luxury goods and a tax on mobile phone usage. The government has also simplified the tax code and made it easier for businesses to comply with tax laws.
However, these measures have not been enough to significantly increase tax revenue. The government needs to do more to address the challenges that are preventing Pakistan from collecting more taxes.
Ishaq Dar's call for the FBR to boost tax revenue collection efforts is a welcome one. Pakistan needs to increase its tax revenue in order to finance its economic development. The government needs to take further steps to simplify the tax code, make it easier for businesses to comply with tax laws, and crack down on tax evasion.
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