COUNTRY representative of the IMF Dr Mahir Binici on Thursday called for a broader, simpler, fairer and more predictable taxation system in the country to generate resources for human capital development, infrastructure and investment, saying this would help raise Pakistan’s potential gross domestic product (GDP) and improve living standards. Speaking at a seminar organized by Sustainable Development Policy Institute (SDPI) he praised the country’s efforts to maintain economic stability amid recent global and domestic challenges, but stressed the need for deeper and broader reforms to put the economy on a sustainable growth path.
Negative impact of the bitter reforms on the common man notwithstanding, the fact remains that it was because of the comprehensive reforms that Pakistan withstood serious shocks and overcame challenges successfully in recent years. These include devastating floods, conflicts with India and Afghanistan, ongoing counter-terrorism operations and the crisis triggered by regional war that has entered into its eighth month. The country was able to manage its affairs due to enhanced tax collection by the Federal Board of Revenue (FBR), rising remittances by overseas Pakistanis and cooperation of some friendly countries like Saudi Arabia and China. The credit for this achievement goes to Finance Minister Muhammad Aurangzeb and his team as they are working hard to move towards realization of the cherished objective of putting the country on its own feet. However, there is an overwhelming impression that instead of making genuine efforts to bring different segments of the society into the tax net, the Government is increasing tax collection through measures like imposition of levy on petroleum products putting enormous burden on the common man. The IMF has justifiably emphasized that Pakistan had reached a critical juncture where the narrative needed to change, with discussions moving beyond taxation to focus on how reforms could translate into investment, economic activity, exports, employment and improved living standards. The goals are realizable if due focus is laid on bringing the cost of production down to stimulate the sluggish industrial and agricultural sectors and proper incentives are offered for the IT and telecom sector.
