Business
WB demands high power, gas tariffs, pension reforms in Pakistan
World Bank has suggested increasing taxes on socially harmful goods, including tobacco, other unhealthy products and goods that harm the environment.
Islamabad: The World Bank has asked Pakistan for continuous recommendations on increasing electricity and gas rates as well as pension reforms.
The World Bank in its Pakistan Development Update on Pension Reforms has called for the immediate introduction of reforms to reduce the financial burden arising from federal and provincial public sector pensions.
According to the World Bank, preliminary steps should be taken to develop and implement a pension reform plan to ensure long-term financial sustainability. Initial steps should be taken under the reform plan to rationalize public sector remuneration.
The World Bank has also called for price reforms in the electricity and gas sector to be linked to supply costs to limit rising revolving credit in the electricity and gas sector and to protect the poor by increasing social protection.
On Personal Income Tax (PIT) revenue reforms, the World Bank has also called for reforms in the personal income tax system to reduce complexity by streamlining schemes for salaried and non-salaried employees.
According to the World Bank, PIT schedules should be reformed by harmonizing the rate structure among taxable income sources and treating certain sources of income to increase equity by eliminating the privileged class.
In its report, the World Bank has suggested increasing taxes on socially harmful goods, including tobacco, other unhealthy products and goods that harm the environment.
In addition, the World Bank has called for the elimination of personal income tax "withholding" charges on consumption of energy products, telecommunications, financial services and others to reduce the total tax burden on poor and vulnerable households.