A staggering loss of Rs. 95 billion ? more than even the Defence Budget ? has been suffered due to tax evasion last year, the Finance Ministry informed parliament yesterday.
According to a report tabled in parliament, the Department of Inland Revenue had been deprived of about Rs. 39 billion due to evasion of Value Added Tax, about Rs. 20 billion due to evasion of Goods and Services tax, Rs. 18 billion through evasion of Income Tax, Rs. 8 billion from Turnover Tax and Rs. 7 billion from the National Security Tax.
The report said that tax dodging of the surcharge on income tax amounted to Rs. 2 billion while those in the betting and gaming trade had dodged payment of about Rs. 25 million.
The total fiscal revenue for 2004 amounts to Rs. 164.8 billion and it represents a growth of 18.5 percent over the figure for 2003.
Over the past two decades, tax evasion is known to have deprived the country and the people of billions of rupees despite corrective action by various governments.
In recent years, the government proposed measures to restructure the Inland Revenue Department in a bid to streamline operations and curb tax dodging. But the proposals ran into severe opposition from trade unions and others who alleged the restructuring was a subtle process for privatisation of this key department.
According to investigations, big-time business operators and wheeler-dealers in areas like the arms trade are not the only tax dodgers. Other big-time tax dodgers are known to include some in the highly-respected medical and legal professions.