transparent law would hurt corrupt elements on both sides of the political divide.
Dr Shahid Zia, a senior analyst, said it had always been difficult to introduce reforms in multicultural, multilingual societies such as Pakistan.
In order to move ahead, one has to make compromises, he said, adding, for instance, in order to develop Gwadar the people of Balochistan have to be satisfied and compromises made to ensure that the project is expedited.
“You will not face any problem if you develop Chittagong Port in Bangladesh, as it is a unicultural and unilingual country.”
He said speedy development of Gwadar would open numerous trade opportunities for the country. Similarly, Kalabagh Dam cannot be built without consensus from all the four provinces, he said.
The revenue collection remains top most problem in the country, but for the federal government income tax is the only avenue of tax collection, as sales tax on services are under the domain of the federal government.
He said increasing income tax is linked to documentation of economy for which a political consensus is needed.
Dr Zia said provinces have not exploited the huge potential of services tax, as most of the service sectors such as doctors, beauticians, lawyer, hair dressers and most of the restaurants are operating outside the tax net.
The provinces are not pushed as well to collect more revenue, as they get ample amount as their share from the federal taxes to operate on surpluses, he said.
Faisal Qamar, another economist, said there are certain areas in the tax regime where political consensus is not required. Under-invoicing and smuggling is depriving the country of at least Rs300 billion in revenues, he said.
High duties whether import duty or sales tax encourage smuggling and under-invoicing, said Qamar, adding, it has been evaluated through various studies that the cost of under-invoicing and smuggling is of 15 percent of the average price of the product.
He said if the government ensures that the cumulative duty and sales tax on any product would not be more than 15 percent these two menaces would be adequately addressed and the surge in revenues would be enormous.