ISLAMABAD - Federal Board of Revenue has suggested the government to impose tax on agricultural and real estate sectors and wealth tax in order to broaden the tax base of the country, as Pakistan’s tax-to-GDP ratio is lower than other Asian countries.Pakistan has lower tax-to-GDP ratio (less than 10 per cent) compared to other Asian countries. Sri Lanka’s tax-to-GDP ratio is 13 per cent, India 16 per cent, Indonesia 15 per cent, Malaysia 14 per cent, Thailand 17 per cent and South Korea’s 16 per cent. This weakness has put Pakistan in deep quagmire of debt trap. This trap by nature is intriguing, cyclical and suffocative. The trade starting with a stagnant tax to GDP ratio, entails cut in public development expenditure, hampered growth momentum, squeezed tax potential, forced public borrowing, unemployment, poverty, burgeoning inflation, suppressed aggregate demand and supply.According to Annual Report 2011-2012 of Directorate General of Internal Audit (Inland Revenue), Federal Board of Revenue, Pakistan has narrow base of taxpayers vis-à-vis total population, as in total population of 170 million only 2.7 million are registered as taxpayers. The source of revenue collection is mostly salaried class and huge tax gap exits in actual revenue collection and revenue receipts. In Pakistan, we have still been able to collect tax from business class and on services from only 0.9 million taxpayers. The report further stated that there is dire need to bring informal economy into the tax net in order to broaden the tax base of the country, as informal economy constitutes more than half of an economy. It includes all black money underground economy, smuggling, drug business etc. thus depressing over the tax to GDP ratio. There are certain hurdles in broadening tax base like distrust of people in use of tax money, negative attitude of tax collectors etc.The report stated that political will would be required to implement the policy in broadening of tax base of the country. The report suggested tax on agricultural income in order to broaden the tax base, as this sector contributes 20 per cent to overall GDP whereas its share in tax is only 1.2 percent. The report also suggested bringing real estate into the tax base. Similarly, there should be cooperation of different government and private agencies in collecting information regarding non-taxpayers e.g. NADRA and banks.According to the report, there should be centralized data base system and it should have linkages with national, provincial and regional database. The report said that filing of wealth statement in cases of income exceeding Rs 5,00,000 and examines accretion of assets.Experts say that political will and governance capacity play a key role in the success and failure of any tax reform. Further, tax concessions, exemptions and zero ratings have been a common norm of our various governments all along, which has checked the growth of tax to GDP ratio performance of the country.