PM spells out plan to remove fiscal woes of country

ISLAMABAD: Prime Minister Shahid Khaqan Abbasi on Wednesday spelled out his plan to remove fiscal woes of the country, including launching of one-time amnesty scheme for declaring foreign assets of Pakistanis abroad, lowering the tax rates and bringing wealthy individuals into the tax net.

The premier said that elections would be held in a few months and hoped that they would come back into power but if not so, even then reforms should continue. He said that the evaded money was going into the real estate and it could be overcome by jacking up the valuation rates in order to bring it at par with market rates.

Interestingly, contrary to the prescription given by the PM Abbasi, the FBR has recently slashed down the valuation rates of properties in some areas in six major posh cities.

“We will bring one-time amnesty scheme,” Prime Minister Khaqan Abbasi announced while addressing a conference on economy organised by the Pakistan Business Council (PBC) here on Wednesday.

He said that the other way to curb evasion was use of technology as with help of Nadra those individuals would be identified who could not justify their consumption pattern. “We can use this stick to broaden the tax base as we are committed to bringing potential individuals into the tax net,” he said and added in the same breath that the higher tax rates for corporate sector were not sustainable so these rates would be brought down.

He said the tax base of 1.2 million tax filers was dismallylow and that should be expanded. He said the FBR collected Rs200 billion from individual taxpayers out of its collection of Rs4000 billion which stands at less than 5 percent. He said that there was need to take some remedial measures through undertaking of tax reforms including lowering of tax slabs for individual and corporate taxpayers and jacking up minimum taxable limit for individuals. The loss in revenues after reducing tax rates will be compensated with bringing potential individuals into tax net, said the premier.

He said that the government and business community were on same page and now there was need to develop roadmap to reach at the desired destination. The way forward, he said, was quite obvious as the country was performing below than its potential so there was need to work out plan which could be delivered.

He said that when they came into power in 2013 after winning elections, they had envisaged three aims including improving law and order situation, overcoming energy and improving economy. Now five years down the line, the premier said that the law and order situation was restored to large extent. The sacrifices were made and the government remained focused for bringing improvement, he said and added that Pakistan was now much better position than before.

On energy front, PM Abbasi said Alhamdulillah the energy crisis was overcome more or less but also set the roadmap for future. “There will be no power shortages up to 2030,” he added. He said that there was need to tackle inefficiencies which still existed and causing source of circular debt. It’s a serious concern, he noted.

On economy, the PM Abbasi said that it was source of debate in the media as macroeconomic issues surfaced as the export figure of $20 billion was quite low. “The exports should be doubled as it could be set in the higher range,” he added. He further said that Pakistani exports would have to become competitive to get its due share, adding that the government could not do it but it could facilitate exporters and manufacturers to achieve the desired results.   Regarding China Pakistan Economic Corridor (CPEC), the premier said that it was big opportunity and said that it was tip of ice berg and there was need to identify benefits for Pakistan.