University of Central Punjab

Topic: Which tax system is better for Pakistan?

In our opinion self-assessment tax method is better than imposed tax but some measures can be taken in other to stop people from hiding their income or taxes. Self-assessment is better tax system for Pakistan because of these reasons; 1. First drawback of imposed tax method is that, tax offices charge high tax from tax payers and then make deal with them to show low tax if they will give some money to tax officers. Therefore Government collects less revenue with this method. 2. Another drawback of imposed tax system is that tax officers try to charge high tax from tax payer in order to force them to pay commission to them. This is the cause people like to conceal their income because they know that government will get very few amount and it will only favor tax officers. So this system results in less tax payers. 3. Another reason of choosing self-assessment is the ground realities of Pakistan. When Pakistan moved from imposed tax system to self-assessment tax system. Tax payers and tax revenues of Pakistan increased. 4. Self-assessment tax also encourages people to pay tax because they by themselves have to calculate the tax, so there is no chance that tax officers will charge high tax from them.

While there are some measures that can be taken in order to stop the concealment of tax by tax payer. 1. Government can announce that they will randomly pic some returns in order to verify them. This will help the government to reduce the chances of fraud in returns. 2. Government should impose high penalties if someone makes wrong calculations and hide his/her tax. 3. Government can also publish annually the reports in newspaper about the penalties made to false returns. This will force people to file correct returns in other to save from penalties.