The World Bank has said tax reforms could enhance taxes share in Pakistan’s economy by two percent.

Imposition of tax on the agriculture income could increase taxes share in the economy by one percent, according to a WB report.

In Pakistan 114 million people are employed, while only 8 mn are registered as income taxpayers, the bank stated.

“Direct taxes have only 33 percent share in the country’s tax revenues as indirect taxes have major share in taxation revenues,” World Bank report said.

The bank’s report pointed out that the real estate sector enjoys more investment owing to lesser rate of taxation in the sector. There is lesser value of investment in production sector owing to investment in real estate, according to the lender.

Taxation rate on land has been less in Pakistan, “Ninety percent cultivators are not liable to pay tax,” bank report stated.

“Agriculture land could also be utilized for other objectives for revenue generation,” World Bank suggested.

“Pakistan have a complicated taxation system. Jurisdictions of the federation and provinces are unclear in taxation matters and an overlapping among the centre and provinces also affects the tax collection revenues,” report added.

“The people in two major areas in the provincial jurisdiction — real estate and agriculture — had most of the untaxed wealth, which should be taxed by the provincial governments to be able to improve services and reduce the financial burden on the centre,” a media report earlier quoted the WB officials as saying.