Before the devolution, the federal government was spending 0.39% of the GDP on the 17 ministries that were subsequently devolved to the provinces under the 18th Amendment in the Constitution. In its recent publications, the World Bank has advised the federal government to realign its expenses only to those subjects, which under the Constitution were its responsibility. The World Bank findings also showed how the rich class was availing subsidies meant for the impoverished people in Pakistan. The World Bank has also pointed fingers towards sales tax exemptions being given to affluent groups that were heavily costing the compliant taxpayers. If the Rs5 million GST registration threshold is removed, the collection potential will jump to 6.53% of the GDP, according to the World Bank.

Source: The Express Tribune April 06, 2023 17:37 UTC