Experts have suggested reduction in taxes, increase in exports and lessening the budget deficit in the upcoming budget.
Speaking in Geo News programme, Budget Ki Chaal 2017-18, organised at the Lahore University of Management Sciences (LUMS), economists and experts called for making the next budget export-friendly, reviewing import policy, enhancing direct tax recoveries and cutting down the indirect tax recoveries.
The programme was conducted by Shuja Qureshi, and the among the panellists were: Federal of Pakistan Chambers of Commerce Vice-President, LUMS expert on financial affairs Hazeema Bukhari, All Pakistan Textile Mills Association (APTMA) Chairman Aamir Fayyaz, an economist Dr Khalid Mahmood Khalid, and Member Executive Committee Lahore Chamber of Commerce and Industry.
Speaking on the occasion, Hazeema Bukhari said that tax rate should be reduced as without winning confidence of the people, tax recoveries could not be made. She said as soon as a company is established, the sword of Income Tax, Withholding Tax, and Turnover Tax payments is hung over it permanently. That is why new companies are not being set up, she regretted. She said it is high time the tax system is reviewed anew.
Aamir Fayyaz said that the biggest challenge facing the government currently is how to overcome the budget deficit. He said Pakistan’s exports were high compared with Bangladesh in 2005, but now the latter has left the former behind now. There would be no increase in growth rate of the country if the budget deficit is not lessened.
Dr Khalid Mahmood Khalid told the audience that every year huge figures and data are presented on the occasion of budget presentation but no practical steps are taken for achieving these targets. A serious effort will have to be made on this count to run the country.
Kamal Mian, speaking at the seminar, said that the government will have to be very careful in making budgetary allocations and cutting its coat according to its cloth. He said the industrial growth rate has gone down from 8.5% in 2014-15 to 5% in 2016-17, which should be a matter of serious concern for the government. If the government wanted to promote industry, it would have to create business-friendly environment in the country, he added. The prices of raw material have gone up by 4%, Relief will have to be provided in this regard to promote and benefit the industry. Only relief to industrialists will help enhance tax recoveries and jack up GDP to 6%.
From the audience, Khwaja Khursheed said that commercial importer and industrialist both should be provided equal relief. He said the banking sector was squeezing due to imposition of withholding tax on payment through cheques. Now payments are being made by traders through ‘Parchis’ (chits) instead of cheques.
Darshan Singh said textile refund claims were not being cleared on time, which was creating serious problems for mill owners. China and Bangladesh have left Pakistan far behind in this sector, he added.
Faisal Majeed said the vegetable and fruit markets were paying taxes on daily basis, but still they are in crisis. He demanded the government establish state-of-the-art markets for vegetables and fruit business.
Khurram Shahzad said the government should have strict control over its expenses, if it is conscious about tax recoveries. There should be strict control over unnecessary expenses of parliamentarians, and their foreign visits should be stopped immediately. They should get treatment in Pakistan’s hospitals if they suffer from any disease, he demanded.
Fatik Nadeem and Rabia Khan from LUMS presented budget proposals. They suggested making microfinance plans in different sectors. They said health and education sectors could be developed only through public-private partnerships. Other suggestions include setting up more vocational institutions, increasing water tariff for saving water, and localising the tax collection system as the government has failed in recovering direct taxes.
The experts and panellists appreciated these budget proposals. They regretted that exports have gone down from $25 billion to $20 billion in the last four years, and special efforts should be made to increase exports. They said good governance was still a big challenge. Instead of transferring funds to provinces under the NFC Award, policies should be made for collection of taxes at provincial level and linking it with the Award. The experts said the government should continue reviewing the public welfare policies from time to time.