Role of FBR & Economic growth of Pakistan
In the world, to generate public revenues, countries have to collect fees and taxes through different ways.
The states use those in infrastructure, human capital, and the provision of services for businesses and citizens. Also, the taxes have a key role to play in making growth equitable and sustainable, specifically in the context of the COVID-19 crisis.
Still, several countries are struggling to collect enough revenues to finance their development. Those collecting less than 15% of the GDP in taxes need to enhance it to meet basic requirements of the businesses and citizens. It a vital tipping point to make a state viable and put it on a path to growth.
Making tax paying simpler enhances the competitiveness. Moreover, overly complicated systems are associated with large informal sectors, high levels of tax evasion, less investment, and more corruption. For the real growth of a state, it is vital to make best tax policies considering the economic conditions of the inhabitants.
For our country to grow, it is important to make sure that the tax system is equitable and fair.
The government should balance goals including enhanced revenue mobilization, reduced compliance,and sustainable growth, ensuring that the system is equitable and fair.
One of the fair considerations involve the relative taxation of the rich and the poor; individual and corporate taxpayers; cities and rural areas; and the older and the younger generations. The FBR has collected record breaking taxes in the year 2022.
The Federal law enforcement agency is claiming to collect Rs4.858 trillion in the initial ten months of this year, which is 74% more compared to the previous year. In a meeting with Syed Mahmood Hassan Jafri (Chief Commissioner Faisalabad), I came to know that only the FBR Faisalabad has collected more than 54bn rupees.
The total sales tax collected comes out to be more than 23.4%. Although, it is an exceptional work from the end of entire team. Still, there are a number of people who are not in the circle of tax net with their political influence. The institution is happy by the performance of his entire team.
But the questions; which business and salaried class is paying all these taxes? Is the government and revenue board aware of the current crisis and inflation that has taken down all the aspects of a common man’s life.
Throughout the history of this country, all the major taxes have been paid by the small to medium scale investors, and salaried individuals.
The lower middle class is exempted from paying any taxes and the rich and the wealthy are master in how to evade taxes on all platforms. Eventually, all the laws and regulations are enforced on the people earning less than 2 million a year. If this situation continues, our country will never be able to stand on its own and develop.
Due to passive policies of FBR, corrupt politicians, and mafias, the graph of Pakistan has gone down so badly in the last two decades that is seems almost impossible to take it back on the track. May it be finance, energy, security, development, or any other sector of the country, no one is willing to take logical and bold steps for the betterment of Islamic Republic of Pakistan.
Since freedom, we all have witnessed, that every politician who ruled on us, has looted the state to their fullest. What will happen if the salaried class and small business owners call a strike due to increasing taxes and all that mess created by the current government?
If compare Pakistan to other countries, the Venezuela has a fuel price of just 5pkr. Unlike us, the country does not have any political and security expenses.
Pakistan can learn from their strategy and implement those ideas into its economy. Moreover, all of the policies of the current government are pathetic that they are just playing with the lives of a common man and pushing them to commit suicide.
In the entire situation, if there is a communication gap between the institutions and the politicians, then what is the fault of the citizens of our country? why people have to-mortgage their houses and sell their vehicles to feed their children. Due to this poverty, several people have taken the wrong path that can lead them to even more harm.
Within a month of taking oath, the government announced ban on imports and 10% additional taxes on the businesses. Business owners whose entire business was to sell imported items or they used to manufacture items such as stitching-clothes by importing fabric, are really upset and in stress.
The leaders literally do not have any strategy and policies to give boost to economy or to provide relief to the citizens. If things will be going in the similar way, politicians will eventually get no body to rule on.
According to me, Pakistan is going through its toughest times. The inflation was never so high as it is these days when fuel prices are sky high and the cooking oil has crossed 600 rupees.
The Prime Minister (Shahbaz Sharif) and the Chief Justice should take a strict action upon the entire situation and provide huge relief to the people of the country.
Everyone is stressed out with this entire scenario. Investors are not willing to invest not even on a small scale. The industries are downsizing which ultimately causing joblessness up to an extreme.
It will be in the favor of Pakistan if all the heads of institutions, and people in power sit together and make a strategy that can benefit Pakistan.
We need to avoid taking further loans from IMF and do not have to agree on all of its terms and conditions. With the help of this strategies, Pakistan can Prosper and Grow again. .—The Writer is a Senior Social and Economic Analyst
