‘Economic policies based on mutual trust, facilitation needed’

LAHORE: Economic policies based on the principle of mutual trust, facilitation and simplification of procedures is the need of the hour, not only for confidence building between government and private sector, but also to increase the tax-to-GDP ratio, which is at the lowest ebb.

This was the crux of the speeches delivered at a seminar on “Federal Budget 2016-17: Challenges and Opportunities”, organised by the Lahore Chamber of Commerce and Industry (LCCI) in collaboration with the Association of Chartered Certified Accountants (ACCA) at the Lahore Chamber premises on Saturday.

LCCI Vice President Nasir Saeed, LCCI Standing Committee on Finance, Taxation and Sales Tax Convener Kamal Mahmood Amjad Mian, Chairman Taxation Sub-Committee, former chairman, PBIT Abdul Basit, ACCA Pakistan Omer Zaheer Mir, International tax lawyer Dr Ikram ul Haq and former Aptma Punjab chairman M Akber Sheikh were the key speakers.

Saeed said that the challenges had always bring opportunities; therefore, mental approach of the businessmen should remain positive, while the government should react friendly and address the concerns of the businessmen who are the backbone of the economy.

He said the businessmen are ready to supplement the government efforts aimed at economic revival of the country. He also covered sales tax, customs duty and income tax matters and said that all economic policies should be aimed at facilitation to growth, be friendly for businesses and easy on spender pockets.

The LCCI vice president said that a sizeable portion of the budget should be earmarked in every federal budget for the energy generation projects, including hydel and coal.

It is unfortunate that the patterns of the budget deficit from previous years continued, as outlays for wages and other expenses, pensions, subsidies, defence and interest payments substantially exceeded federal tax revenues.

It leaves the government’s current operations to be substantially financed through debt that serves as another unconstructive factor that causes such negative forces to take place, which are ultimately resulted in taking new debts to retire old debts. Basit said that the interest payments were also over budget increasing, which pushed the domestic borrowing to drive up the government’s domestic debt.

The LCCI had already proposed the government to maintain financial discipline for the greater benefit of the national economy.

He also recommended imposition of tax on agri-based incomes. He highlighted the need to bring new taxpayers in the tax net rather than further strangling those taxpayers who were already paying taxes on a regular basis. Amjad Mian said that smuggling and under-invoicing are the major cause for huge losses to the national exchequer.