ISLAMABAD: The circular debt of Pakistan reportedly increased substantially in the Pakistan Democratic Movement (PDM) tenure, ARY News reported.
As per details, the PDM government debt in one year was more than the debt of PTI’s four-year tenure.
The circular debt of gas was hiked by Rs 461 billion in PDM one year tenure whereas it jacked up Rs 407 billion in 1.7 years of PTI government.
Sources revealed that the circular debt of gas increased by Rs 940 billion in last three years. The circular debt was Rs 1.551 trillion at the end of PTI government where it jumped up to Rs 2.084 trillion after the PDM tenure ended.
Read more: World Bank advises tax reforms in Pakistan to ease debt burden
It is pertinent to mention here that the World Bank (WB) said Pakistan is collecting less tax than its actual capacity.
Pakistan is falling short of Rs737 billion in tax collection, the World Bank said in its report and urged Islamabad to close all tax exemptions to release the burden of debts.
The WB has suggested Pakistan increase tax incomes from agriculture, properties, and retail businesses to generate additional revenue. Two major areas in the provincial jurisdiction — real estate and agriculture — had most of the untaxed wealth, which should be taxed by the provincial governments, the international lender said.
The real estate sector is also paying Rs402 billion tax in Pakistan than its actual capacity, the report said.
The bank also recommended that Pakistan should simplify its income tax structure, including aligning it for both salaried and non-salaried individuals, while ensuring progressivity.
It has also been recommended to increase the Federal Excise Duty on cigarettes to collect tax up to Rs268 billion from the sector.
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