PAKISTAN Institute of Development Economics (PIDE) really deserves appreciation for not only sensitizing the decision-makers about the grave challenge of over-dependence on foreign loans to meet growing need for external financing but also proposed a realistic roadmap to help the country stand on its own feet. It has timely unfolded an ambitious reform strategy “ISLAAH: Immediate Reform Agenda – IMF and Beyond” highlighting that the country would need a staggering external financing of $120 billion in the next five years, calling for a systemic overhaul to ensure economic progress and prosperity.
The hard work done by the Institute must be acknowledged and its recommendations considered by the relevant stakeholders and policy-makers as these have the potential to address most of our economic and financial challenges. Its recommendations pertain to regulatory modernization, tax reforms, market liberalization, energy sector efficiency and improvements in agriculture and banking. It proposes a policy of ‘regulatory guillotine’ as was successfully done by countries like Hungary, Mexico, South Korea and the UAE; and a shift from a system of permissions to clear rules. The PIDE has also proposed valuable suggestions to reform the tax system that needs the attention of the Finance Minister. It calls for a uniform income tax rate across all sources of income, elimination of presumptive and turn over taxes; uniformity in taxation for AOPs, sole proprietors and corporations; transitioning from withholding to advance income tax; withdrawal of discriminatory exemptions; speedy implementation of POS; elimination of FBR rates for property valuation and harmonizing sales taxes on all services and goods. Instead of wasting further time on committees and commissions, these and many other proposals given by the PIDE should be thoroughly debated and an implementation mechanism firmed up as these can surely prove to be a game changer.
