It remains a formidable challenge for Pakistan’s revenue authorities to harmonise tax rates, a vital component of a sound fiscal system. There are significant tax distortions in the country as a result of its failure to adopt effective tax rate harmonisation measures.

The process of harmonising tax rates between different regions or jurisdictions, typically to achieve greater efficiency, fairness, and consistency in tax administration, is called tax rate harmonisation.

Establishing the National Tax Council in March 2023 allows it to serve as a national entity that addresses tax-related matters between the federal and provincial governments.

This council ensures that tax rates are harmonised across the country for the supply of goods and services. Furthermore, a comprehensive policy concerning tax rates is still lacking.