Prime Minister Imran Khan has said that Pakistan cannot spend money on its infrastructure development, such as hospitals and schools, because it has the “lowest tax collection rate” in the world.
The PM was addressing the inaugural ceremony of the State Bank of Pakistan’s digital payment project, Raast, in Islamabad when he made these remarks.
The PM said the cash economy has badly affected tax collection, which is directly proportional to the lower tax rate. “Out of 220 million people, only two million people are filers,” said the PM, adding that only 30,000 people account for 70 per cent of the total tax collection.
However, the digital payment programme would help Pakistan transition from cash economy to a digital economy, said the PM.
The PM said: “Our biggest problem is the informal economy that’s so big that we could not collect taxes to develop Pakistan.”
“This is an obstacle in tapping our true potential is because we can’t build our infrastructure, we can’t educate children, we can’t improve hospitals, the fastest growing country in the region 50 years ago can’t move forward because it does not have that much money for the development of the country,” he added.
As per the PM, the news SBP initiative will allow the government expand the scope of the development to the lower classes.
He also congratulated the SBP for efficient dealings with the overseas Pakistanis that led to capital growth at an unprecedented rate.
“Our Pakistanis abroad sent money in an official manner due to which the current account deficit, which had been going on for years went into surplus for five months and the people did not care how much benefit was gained from it,” he added.