Revolutionizing Pakistan's Tax Collection: Empowering the Nation by Taxing the Wealthy and Safeguarding the Middle Class

In Pakistan, the path to equitable tax collection lies in a transformative approach: prioritize taxing the affluent while safeguarding the middle class. While this might seem like a daunting task, valuable lessons can be drawn from the United Arab Emirates (UAE), where businesses of all sizes, from quaint shops to conglomerates, are meticulously registered and regulated.

In stark contrast, Pakistan's current scenario sees thousands of businesses, both online and offline, operating without proper registration. This gaping hole in the tax system results in colossal revenue losses for the government. To address this issue effectively, Pakistan should adopt a comprehensive registration system that mandates every business, regardless of its size, to be registered and linked to a bank account.

One glaring issue is the flourishing online business sector, with platforms like Daraz witnessing substantial financial transactions. Many of these businesses channel their earnings into personal, unregistered accounts, evading taxation. To curb this evasion, the government must enforce rigorous monitoring of online transactions, ensuring that they are channeled through registered business accounts.

The burden of taxation should never fall disproportionately on the salaried class. Businesses, on the other hand, can adjust their pricing to offset tax expenses, ultimately passing the burden onto consumers. This imbalance is unsustainable and detrimental to the middle class. Hence, it is imperative to establish a fair and efficient taxation system that primarily targets businesses, preventing them from unfairly shifting the tax burden onto hardworking individuals with fixed incomes.

To truly transform tax collection, the government should take a bold step by offering free registration to all businesses, from the corner store to major corporations. This inclusivity ensures that even the smallest businesses are accounted for, leveling the playing field and allowing the government to collect revenue from all sectors of the economy.

Furthermore, incentivizing tax compliance should be a key strategy. Offering benefits such as access to government services, financial assistance, and preferential treatment in obtaining licenses and permits can motivate businesses to register voluntarily.

In conclusion, the path forward for Pakistan's tax collection system is clear: prioritize the registration of all businesses, tighten control over online transactions, and ensure that the wealthy shoulder their fair share of the tax burden. By implementing these reforms, Pakistan can not only boost revenue but also safeguard the middle class and foster economic growth for the entire nation