Human Security in Pakistan Chart 14.2: Indirect Tax Reforms by the Federal and Provincial Governments as part of the Financing Plan Potential Revenue (% of GDP) Federal Governments 1. More Cascading of the Import Tariff Structure 2. Use of ITPs and 0.5% Handling Charge on Imports 0.25 3. Levy of Sales Tax on Import of Services on the‘Reverse Change’ Principle 4. Levy of Sales Tax on Retail Price of Consumer Durables and Non-essential Goods 5. Broadening the Base of Excise Duty by Levy on Polluting Industries 0.25 6. Harmonization of the Sales Tax on Goods with Provinces of the Sales Tax on Services TOTAL 0.50 Provincial Governments 1. Harmonization of the Sales Tax on Services with the Federal Sales Tax on Goods and 0.25 its Broad-basing TOTAL 0.25 OVERALL TOTAL 0.75 14.2 Enhancing Non-Tax Revenues The yield nationally from non-tax revenues currently is 2.40% of the GDP. There is some scope for increasing revenues from these sources by 0.75% of the GDP. The proposed steps are listed in Chart 14.3. Chart 14.3: Steps for Additional Revenues from Non-Tax Revenue Sources of the Federal and Provincial Governments Additional Revenue(% of GDP) FEDERAL 1. Inflation Indexation of the Petroleum Levy on Petroleum Products 0.125 2. Higher Levies on Domestic Natural Gas and Crude Oil 3. Higher Profit Repatriation by the SBP 0.250 4. Higher Dividends by Increased Profitability of SOEs 0.125 TOTAL 0.500 114