PRIME Minister Imran Khan on Tuesday noted that the rising foreign debt and low tax revenue had become an issue of “national security” because the government did not have enough resources to spend on people’s welfare.
Addressing the inaugural ceremony of the first-ever track and trace system (TTS) of the Federal Board of Revenue (FBR) for the sugar industry in Islamabad, he said that the country’s very sustainability was at stake because of the absence of a “tax culture” and hoped that the use of technology would take revenue collection to Rs8 trillion per year.
The Prime Minister rightly drew attention to the issues of foreign debts and low revenue collection as, according to data released by the Ministry of Economic Affairs, the government took $3.8 billion worth of new foreign loans in the past four months, up 18% compared with the loans taken in the same period of last fiscal year.
The $3.8 billion of foreign loans did not include the borrowing made through the highly expensive Naya Pakistan Certificates at up to 7% interest in dollar terms for only one year.
Given the economic slowdown, the country is heading towards a direction where it would find it difficult to pay back its loans without sacrificing the needs of all sectors of the economy and segments of the population.
There is, therefore, definitely a need for firming up a cogent strategy to reduce the country’s over-reliance on foreign loans and this can understandably be done only when all those with taxable incomes pay their due taxes honestly and willingly.
People welcomed frequent proclamations of the leadership of the incumbent government that the common man would not be burdened and the objective of broadening the tax base would be achieved by plugging loopholes but regrettably this has not happened.
As in the past, all efforts to make the businesses and industry pay their due taxes could not produce the desired results due to pressure and blackmailing tactics adopted by the relevant segments of the society.
Pakistan has the potential to become a welfare state and a strategic player both at regional and global levels but its political sovereignty is compromised because of our economic vulnerabilities and the country is now firmly in the grip of donors restricting its ability to take independent decisions.
In this backdrop, the decision of the government to introduce technology to increase tax collection is a step in the right direction and can surely help plug tax evasion by the industrial and commercial sectors but it will require a lot of time and resources to make it a success.
