LAHORE: The Association of Chartered Certified Accountants on Thursday unveiled its budget proposals for fiscal year 2023-24, and suggested to use AI to identify individuals and businesses using...
LAHORE: The Association of Chartered Certified Accountants (ACCA) on Thursday unveiled its budget proposals for fiscal year 2023-24, and suggested to use AI to identify individuals and businesses using misdeclaration to bring them into the tax net.The proposals aim to address issues such as population growth, climate change, agricultural disincentives, and food security concerns with significant shifts in Pakistan’s economic policies. To keep policies and their implementation consistent, the government, political parties, and business groups should sign a “charter of economy” for the next 10-15 years, the ACCA said. This long-term commitment would provide stability and foster sustainable economic growth.
It suggested a multi-faceted approach to improving the balance of payments, reducing imports, boosting local consumption, lowering inflation, and increasing exports. ACCA underscored the importance of consistent economic policies, leveraging indigenous resources and talent, and embracing a new economic model. In line with these objectives, ACCA recommended sustainable reduction of non-essential imports and identifying import substitutes to lower the import bill. Efforts to promote eco-friendly energy sources, implement daylight savings, and reduced business hours and working days could help decrease reliance on oil and gas imports.
To enhance exports, ACCA emphasised the need to focus on services that leverage Pakistan’s abundant raw materials and skilled youth. Shifting the tax burden to higher-income individuals and subsidising the cost of living for middle and lower-income segments were proposed to ensure equitable taxation policies. ACCA called for significant strides in the documentation of the economy to expand the taxpayer base. Leveraging technologies such as artificial intelligence and data analytics, the global body recommended identifying individuals living beyond their declared means as well as businesses that misdeclare, to bring them into the tax net.
“Structural reforms, including reduced tax rates and simplified compliance processes, can make tax evasion less attractive and improve the efficiency of the taxation system,” its proposal said.It also proposed minimal tax rates for large agricultural landowners, and suggested using the generated revenue to subsidise essential farming needs for small farmers. To facilitate economic recovery, ACCA suggests incentivising local industry, manufacturing, and mining while revising costly agreements in the energy sector.
Investment in green energy projects, encouraging the use of domestic products, and promoting entrepreneurship through the banking sector were also highlighted as key strategies. ACCA underscored the growth potential of Pakistan's IT/ITeS sector and called for favourable policies, tax rebates, and investment in high-skill training to unleash its full potential. ACCA also recommended expanding the tax net by bringing professionals such as doctors, accountants, engineers, lawyers, and architects into the tax system. Furthermore, ACCA proposed the establishment of a venture capital fund to support Pakistani start-ups, subsidies for solar panels, and prioritisation of the livestock sector in the upcoming budget. ACCA's Global Tenets of Taxation serve as a guiding framework to establish public trust and an effective taxation system.
The accountancy body emphasised the importance of openness, transparency, simplicity, and certainty in tax legislation and operations. “ACCA believes that by implementing these budget proposals, Pakistan can pave the way for sustainable economic growth, address unemployment challenges, and position itself as a regional powerhouse,” it said.