The level of Literacy rate and tax education both are different in the case of small cities andtowns. The problem is not mutually exclusive in the case of main cities like Karachi, Lahore,Peshawar, Islamabad etc. This situation requires two different strategies. In the small towns andcities, Government needs to increase the literacy rate as this is something beyond the ambit of FBR, however, in major cities FBR needs to increase the tax literacy rate. This does not onlyinvolve creation of taxpayer facilitation centre and the advertisement in the newspapers andtelevision but something more than that like TV dramas, training by FBR to taxpayer ± Compliance expected by FBR, Avoid paying additional taxes, Be Safe and Secure in terms of Inadmissible taxes, The Direct/Indirect Tax Regime etc.
SUGGESTION FOR IMPROVEMENT
As stated earlier, I think the reasons of non-payment of taxes and ignorant attitude areharsh attitude of taxman, literacy rate and lack of tax education, no intention to pay taxfrom the earnings, afraid of coming into tax net, loopholes tax legislation, competitivecorporate tax rate under global tax competition, personal income tax structure andutilization of tax money.CBR is now improving in the area of harsh attitude of taxman only in relation to Income Taxowing to the scheme of Income Tax Ordinance, 2001. However, CBR is now moving towardsSales Tax and the most important step in this regard is the suspension of Sales Tax Auditfor six months but this is not a long term solution. Legislators need to improve the basicstructure of Sales Tax Act, 1990 to make it taxpayer friendly. Every problem in the SalesTax Act, 1990 is solved either through a Circular or SRO which complicates the issue. It issuggested that the Sales Tax Act, 1990 need to be revamped right from the scratch bearingthe existing Sales Tax Structure, Problems, Organisational Structure of Sales TaxDepartment, Long/Short term Macro and Micro Economic policies in mind. In furtherance,CBR need to work on Excise Tax and this requires a clear indication from the governmenteither to abolish it and replace it with Sales tax or Continue with Excise Tax.Literacy rate and tax education are mutually exclusive in the case of small cities and towns.The problem is not mutually exclusive in the case of main cities like Karachi, Lahore,Peshawar, Islamabad etc. This situation requires two different strategies. In the small towns