ISLAMABAD According to The News, Pakistan’s tax evasion (revenue gap) was expected to be approximately Rs5.8 trillion on an annual basis for the fiscal year 2022–2023, or 6.9% of the country’s GDP.
The Special Investment Facilitation Council (SIFC) and Prime Minister Shehbaz Sharif were informed of this during a presentation. It states that smuggling and other methods are thought to be the cause of the estimated Rs996 billion in petroleum product evasion.
Retailers made up Rs888 billion of the nation’s evasion, followed by the transportation sector at Rs562 billion, independent power producers (IPPs) at Rs498 billion, smuggled goods at Rs355 billion, exports at Rs342 billion, and real estate at Rs148 billion annually.
The yearly projected amount of tax evasion under the “others” category was Rs1.607 trillion.
According to the presentation, sales tax evasion is the most common type of tax evasion, with an annual potential value of up to Rs2.9 trillion. Additionally, the yearly customs deficit, which includes under-invoicing and smuggling, was estimated to be around Rs0.6 trillion (Rs600 billion).
According to the International Monetary Fund’s (IMF) diagnostic study, the policy-level tax gap is not very large and can reach a maximum of 12.9% of GDP.
