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Trade gap, inflation challenges for govt
Karachi—Speakers at a pre-budget seminar have
underlined that restoration of law & order, burgeoning trade deficit
and high inflation are major challenges for the new government. The
seminar was organised by the Institute of Cost and Management
Accountants of Pakistan (ICMAP) here. Addressing the first session
of the seminar, Director General Regional Tax Office Karachi, Asrar
Rauf gave details of the reform process in the Central Board of
Revenue (CBR), now replaced by the Federal Board of Revenue (FBR).
He said that the CBR had planed to enhance the tax-to-GDP ratio by
16, 17 and 20 per cent respectively and total revenue might cross
the one trillion rupee mark this year.
He said that in the past the tax was levied on easy collection
points like production and import stages but since reforms process
started in 2002 the number of taxes were minimized besides the
reduction of tax rates. “Now emphasis is given to third party
intervention and we collected Sales Tax and Income Tax offices in
order to facilitate taxpayers, while on Direct Tax side we
introduced computerized tax collection receipts.” President ICMAP
Sher Afghan Malik appreciated the composition of the newly elected
government, and said they placed efficient professionals in
different fields. However, everyone has to do their jobs in their
individual capacity. He said that the government first has to
restore the law & order situation which turned away foreign as well
as local investors.
He said the government has to come up with policies to promote trade
and industry in order to curb the widening gape of trade. He said
that Pakistan was one of the largest cotton producing countries, but
it could not compete with Bangladesh, which buys yarn from other
countries. He said the Pakistani workforce can compete with any
other country, as it is extremely productive in many foreign
countries. He said that inflation was the second largest threat to
the country and stressed that the government would have to work hard
to bring down inflation. He forecasted that there was a possibility
that oil prices might go up to $150. However, he added, we have to
stabilize our currency by bringing down imports through over
producing.
Dr Kamal Azhar Minhas Additional Collector Sales Tax pointed out
that many sectors were making profits by taking the benefit of zero
rated sales tax. He said that in the fiscal budget 2005-06, the
government exempted the dairy sector from sales tax but milk
packaging companies on the other hand, did not pass on the benefit
to the consumers. He was of the view that sales tax on
pharmaceutical companies should be abolished in order to provide
relief to consumers. Iqbal Ibrahim Chairman All Pakistan Textile
Mills Association (APTMA) said, “The inflation has become a foreign
based phenomena and during the current era of globalisation and
price hikes in all commodities in the world, we can not stop
imports.” He proposed that the food and agriculture sector should be
given top priority in the next fiscal budget. “We need to adopt
better managed cotton by adapting the latest technology in seed
breeding to produce hybrid seeds, particularly BT seed varieties,
and immediate arrangements should be made to replace the current
poor quality deteriorated seed by new and promising varieties of
seed,” he said, and maintained that India doubled its crop in three
years by adopting prudent agriculture policies.
He said we need to address issues for long term basis and subsidies
should be extended to private seed corporations. He said that the
global textile industry was likely to grow from US$300 billion to
$850 billion and Pakistan has a huge opportunity to capitalise on a
much larger portion of this growth.—APP
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