Thursday June 20, 2024

Experts suggest various ways to broaden tax base amid challenges

Geo News is broadcasting ‘Great Debate’, a programme to find solutions and broach discussion on the pressing issues

By News Desk
May 27, 2024
Economic experts participate in Great Debate live on Geo News. — screengrab/GeoNews/YouTube
Economic experts participate in 'Great Debate' live on Geo News. — screengrab/GeoNews/YouTube

KARACHI: The country’s top financial and economic experts, including former finance minister Miftah Ismail, have stressed that all sectors must pay taxes in a bid to broaden the country’s tax base, saying the masses cannot be “served for free” amid the plethora of challenges facing the country.

As the country undergoes a long-lived economic turmoil while several problems plague the country’s well-being and stability, Geo News is broadcasting ‘Great Debate’, a programme to find solutions and broach discussion on the pressing issues. Pakistan’s biggest and most important ‘Great Debate’ on economic issues brings for its viewers the thoughts and opinion of economists and top entrepreneurs of the country.

Senior journalist and analyst Shahzeb Khanzada is hosting the ‘Great Debate’ on Geo News. Miftah, who is a former Pakistan Muslim League-Nawaz (PMLN) leader, said that the entire world has expanded the tax net and Pakistan can also do that. He said that the outgoing fiscal year was also “wasted” by not expanding the tax net, while mentioning that the tax-to-GDP ratio will reach 10% this year but that would still be insufficient.

Experts suggest various ways to broaden tax base amid challenges

“The situation here in the country is that no tax is collected from the gold sector,” Ismail added. He suggested that different tax rates on properties in the real estate sector should be abolished and sales tax should be imposed on the industrial level instead of collecting taxes from the retailers. He also called for taking all stakeholders related to tax collection matters on board and introducing a fixed tax system.

Meanwhile, former Federal Board of Revenue (FBR) chairman Shabbar Zaidi said that electricity consumers should be brought into the tax net while acquiring power connection, which he said is not a practice in Pakistan. He said that there were 3 million industrial consumers and only 100,000 of them file tax returns. “Our economy is not working. The entire nation would have to work together for the tax collection system,” the economist stated.

Zaidi noted that the amount of property tax collected from Mumbai alone was greater than the property tax collected from entire Pakistan. He suggested that property surveys should be conducted, while lamenting that the political system of the country doesn’t want any big change.

Meanwhile, All Karachi Tajir Ittehad Chairman Atiq Mir urged the traders to become filers as it would benefit them. “Policies made behind closed doors don’t work,” he said, adding that the policies made on the governmental level were not implemented. He said that small traders should be approached and issues of taxpayers should be resolved. The tax net couldn’t be expanded by force, he added. Mir said that electricity bills were a major burden on consumers and running businesses had become difficult in the current economic situation.

Economic expert Ammar Habib Khan suggested abolition of cash economy and shifting focus on digital payments. “Cash transactions of more than Rs5,000 should be banned,” he said. Though he noted that gold traders would never accept digital payments but the issues can be resolved by setting up a system.

Pakistan Kisan Ittehad President Khalid Khokhar lamented that “agriculture and farmers have never been the country’s priorities”. He said Pakistani farmers didn’t get as much profit compared to the farmers elsewhere in the region. “Our production cost is way too high. The agriculture sector is no longer profitable in my view as farmers suffer losses on each crop,” Khokhar said. He suggested that the production cost for farmers should be slashed. Khokhar said the agriculture sector needs at least 7% growth, adding that the sector would be abolished if sales tax was imposed on agriculture input.