Latest news with #revenuecollection
Arab News
02-07-2025
- Business
- Arab News
Pakistan PM orders wider POS rollout after $3 billion tax surge to sustain reform momentum
ISLAMABAD: Prime Minister Shehbaz Sharif on Wednesday directed the Federal Board of Revenue (FBR) to expand its Point of Sale (POS) system across the retail sector in an effort to plug revenue leakages and document more of the cash-driven economy. Pakistan has undertaken a series of tax reforms in recent years under successive International Monetary Fund (IMF) loan programs, focusing on digitization and expansion of the taxpayer base to improve revenue collection and reduce reliance on external financing. The POS system is part of this broader effort, aiming to improve compliance and transparency in a country where large segments of the retail economy operate informally, often escaping documentation and taxation. The POS system, which digitally links cash registers at retail outlets with the FBR's central database, allows real-time monitoring of sales and automated calculation of sales tax, reducing underreporting and tax evasion. 'The FBR must widen the scope of its Point of Sale system in retail,' Sharif said at a review meeting on tax reforms. 'The production processes of all industries, including tax defaulters, should be digitized to bring them into the tax net.' During the meeting, Sharif praised the FBR and the finance ministry for a 42 percent increase in federal tax revenues in the last fiscal year, saying it was the highest in a decade. Officials briefed the prime minister that Rs865 billion ($3.03 billion) in additional revenue had been collected during the previous fiscal year, owing to stronger enforcement and digitization. The tax-to-GDP ratio also rose to 11.3 percent, up 1.5 percentage points from FY24. Addressing the participants of the meeting, Sharif emphasized the need for respectful treatment of taxpayers. 'The FBR must treat the public with respect and dignity while fulfilling its duties,' he said. 'No negligence in achieving economic targets will be tolerated for the sake of Pakistan's bright economic future.' Sharif instructed the FBR to extend the Track and Trace Digital Production System to monitor goods from production to delivery. Officials informed him that the system has already been implemented in the sugar, tobacco and fertilizer sectors, and will soon cover cement and other industries. 'All institutions must work with full dedication to meet the new fiscal year's targets. Any complacency will not be tolerated,' the prime minister warned, adding that he is personally monitoring all revenue-related progress.
BBC News
26-06-2025
- Business
- BBC News
Nigeria's tax reform: What to know as President Bola Tinubu signs new laws
Nigeria's President Bola Tinubu has signed four finance bills into law in a set of major reforms aimed at restructuring the tax system in Africa's most populous government says the new laws will simplify revenue collection, reduce the tax burden on some individuals and businesses, while also helping to raise much-needed government income revenue by making collection more efficient."The tax reforms will protect low-income households and support workers by expanding their disposable income," said President Tinubu in a statement to mark the second anniversary of his administration last month. What reforms were made? The four new laws are:The Nigeria Tax Act, which merges various rules into a single, easier-to-understand code and eliminates more than 50 small, overlapping taxes. The presidency has said that reducing the number of taxes and eliminating duplication, will making doing business easierThe Tax Administration Act, which sets common rules for how taxes are collected across federal, state, and local governmentsThe Nigeria Revenue Service Act, which replaces the Federal Inland Revenue Service (FIRS) with a new, independent agency - the Nigeria Revenue Service (NRS)The Joint Revenue Board Act, which improves co-ordination between levels of government and creates a Tax Ombudsman and Tax Appeal Tribunal to resolve disputesTogether, these laws aim to create a fairer and more efficient tax system across the country, the Nigerian government says. What difference will they make? The impact is expected to be significant especially for low-income earners, small businesses and informal people earning up to 1m naira ($650; £470) a year, a rent relief of 200,000 naira ($130) will be applied, effectively reducing their taxable income to 800,000 naira ($520). This means they will no longer pay income tax, according to Andersen Nigeria, a tax and business advisory of essential goods and services such as food, healthcare, education, rent, power, and baby products will no longer have to charge a Value Added Tax (VAT), helping families better afford their basic businesses with annual turnover below 50m naira ($32,400) will no longer pay company income tax. They will also be allowed to file simpler returns, without needing audited businesses will benefit from reduced corporate tax rates, dropping from 30% to 27.5% in 2025 and 25% in subsequent years. They will also now be able to claim tax credits for VAT paid on expenses and assets, meaning they can get back the 7.5% that would have been paid as are also tax incentives for charitable groups, co-operatives, educational and religious organisations, provided their earnings do not come from commercial activities. Who will be affected the most? Low-income households stand to benefit the most, as many will no longer have to pay income tax while also enjoying price relief on essentials. A typical family spending most of their income on rent, food and transport will see lower costs due to the VAT businesses should also see positive changes through more streamlined bureaucracy, which could help boost compliance and encourage informal traders to enter the tax individuals and luxury consumers may feel the pinch slightly, with higher VAT now expected on luxury goods and premium services, and capital gains tax imposed on large share sales. Were the reforms necessary? The government argued that the tax system was outdated, inefficient and unfairly harsh on the poor. Nigeria's tax-to-GDP ratio, a key measure of how much tax the country collects relative to its economy is just over 10%, far below the African average of 16–18%.Tinubu's administration wants to grow that ratio to 18% by 2026 without raising taxes on basic goods or overburdening struggling simplifying tax rules and encouraging voluntary compliance, officials hope to raise more money for funding infrastructure and public services, such as healthcare and education, as well as reduce the reliance on borrowing money. What are Nigerians saying? Many small business owners welcome the exemption from company income tax but say they remain wary of how it will be enforced in practice."I like that we won't have to pay company income tax any more. But honestly, I just hope they don't replace it with another levy we don't understand. Sometimes you pay tax but still get harassed by officials asking for different permits," says Chidinma, a small business owner in low-income earners, the promise of cheaper essential goods like food, rent and electricity is encouraging, but many are reserving the new tax reforms promise relief for small businesses, economist Emmanuel Idenyi warns that the reality may be different unless enforcement practices change. He says overzealous implementation by tax authorities could undermine the government's good intentions."Even tax officials have revenue targets. So when you file, they reassess and add more. That's where businesses start struggling."Meanwhile, Taiwo Oyedele, who chairs the Presidential Fiscal Policy and Tax Reform Committee, struck a hopeful tone during a recent town-hall meeting."Ninety per cent of Nigerians support the tax reform bills," he said, but cautioned that "successful implementation will depend on awareness and trust".There has been a muted reaction from opposition parties and unions. More BBC stories on Nigeria: Why Nigeria's economy is in such a messWhat is behind the wave of killings in central Nigeria?Culture and colour come out in praise of a Nigerian king'No-bra, no-exam' rule at Nigerian university sparks outrage Go to for more news from the African us on Twitter @BBCAfrica, on Facebook at BBC Africa or on Instagram at bbcafrica
