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Pakistan Economy: Pre-Budget Survey
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Pakistan Economy: Pre-Budget Survey

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Pakistan Economy: Pre-Budget Survey …

Pakistan Economy: Pre-Budget Survey


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  • 1. SDPISustainable Development Policy Institute Factsheet on Pre-budget Survey on Economic Reforms 18th April 2014 Household Survey Results Taxation • 68% think that income tax system in Pakistan is neither fair nor transparent. It burdens existing tax payers • 65% think that agriculture and services sectors largely go untaxed. New sectors should be brought under the tax net • 47% think that filing of income tax returns is a complex and cumbersome process • 57% think that agriculture incomes from medium and large farms should be taxed • 71% think that rates of GST are too high and not responsive to slowdown in economic growth or hike in inflation • 67% say that food items and medicines should be exempt from GST • 45% respondents think that full-VAT will be a better option than GST in VAT mode • 50% who never gets receipts from local grocery store in turn giving rise to undocumented consumption • 91% think that tax payer’s money is not effectively utilized by the government • 51% think that corruption in the tax administration is the main reason of low tax collection in Pakistan • 25% are willing to pay 10% additional taxes if the collected amount was invested in their area Energy Sector • 51% feel that the single most important step to overcome the energy crisis in Pakistan is to reduce electricity theft • 29% feel that Government's single most important priority in energy sector for short term should be keeping electricity prices low • 78% say that their level of energy consumption is not sufficient for their daily needs • 53% feel that electricity prices are too high for their household budget • 71% have reduced the amount of electricity used in their home in the wake of increase in electricity prices • 65% think that gas supplies should be diverted to producing electricity and save industry/industrial jobs. Government should reduce the gas supply to transport (CNG) • 42% have noticed instances of electricity theft in their local area 1
  • 2. SDPISustainable Development Policy Institute • 41% said that the government must undertake advocacy and outreach campaigns to encourage people to conserve energy Business Sector (Formal) Taxation • 66% feel that tax administration is not competent and are not trained in business-friendly tax facilitation • 84% firms favor further trade liberalization with India and trade promotion with Afghanistan • 81% firms are of the view that corporate taxes are not applied fairly • 77% have never filed their grievances with FBR fearing that doing so may invite unnecessary intrusion and harassment • 70% of firms have to seek help in filing their tax returns. They view the process complex and cumbersome • 66% firms who think that corruption in the tax administration is the single most important reason for low tax collection • 31% firms have given informal payments (bribes) to tax officials • 74% firms think that rates of corporate taxes are too high in Pakistan • 48% firms will prefer full-VAT over GST in VAT mode • 76% firms say that GST rates are too high in Pakistan • 49% are in favor of expansion of GST through inclusion of most services sectors Energy Sector • 27% think that government’s single most important priority in improving business climate for private sector should be overcoming energy crisis • 37% firms are willing to pay 10% extra bill if the number of hours electricity available are increased • 75% firms who feel that available electricity is not adequate for their current output levels • 30% firms feel that available gas is not adequate for their current output levels • 58% firms will continue to use same level of electricity and pay extra amount if the prices increase. They will however have to cut back on other budget heads • 42% businesses will cope with the electricity shortage by purchasing and maintaining oil and gas-run generators • 35% firms had knowledge of electricity theft • 47% firms say that government’s prime focus should be to reduce electricity theft 2
  • 3. SDPISustainable Development Policy Institute • 67% recommend that priority for provision of gas should be given to industrial sector for securing jobs • 58% feel that Chambers of Commerce and other business associations should play a role in contributing towards energy conservation Business Sector (Informal) Taxation • 57% say that no incentive scheme by the government will persuade them to register with tax authorities • 41% entities view informal segment of the economy to be more profitable in future • 50% say that maintaining transaction records/receipts is not necessary and leads to resource wastage • 69% view firm registration as a difficult, expensive and cumbersome process • 64% feel that tax rates for their business are very high and registering with the tax authorities will mean bearing burden of taxes • 52% think that businesses registered with tax authorities are subject to frequent audits • 62% think that engaging accountants to help file taxes is expensive • 83% say that tax authorities are not helpful and their dealing with registered businesses is unfair • 75% think that information on tax compliance is not easy available Energy Sector • 37% will pay the additional 10% bill if the number of hours electricity is available are increased • 41% have information on instances of electricity theft in their vicinity Link to Complete Reports: http://www.sdpi.org/research_programme/researchproject-249-26-60.html 3