SBP Report Reveals Urgent Need for Tax Reform in Pakistan: C-Efficiency Ratio and GST Concerns

• State Bank of Pakistan (SBP) reveals alarming insights on C-Efficiency Ratio (CER) and GST in Pakistan
• CER measures tax efficiency and enforcement in a country
• Pakistan’s CER declined to 20.7% in FY24, signaling poor compliance and enforcement
• Low CER leads to narrow tax base and lost revenue
• Government introduced measures to broaden tax base but results are not yet seen
• International best practices suggest lower GST rates with better enforcement lead to higher revenue yields
• SBP’s analysis shows potential for significant revenue gains if Pakistan improves its CER
• Broadening tax base and enhancing enforcement could lead to 1.5-fold increase in revenue collections to Rs 5.4 trillion

Source: pkrevenue.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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