Broadening the base

This is with reference to the editorial 'Super tax' (June 25, 2022). Undoubtedly, the ‘super tax’ on Pakistan’s elite is an appropriate step towards stabilising the country’s ailing economy, at least in the immediate term. However, needless to say, it will require a lot more to resolve the major structural issues that plague our economy such as the fiscal deficit and food and energy inflation. Boosting exports and, in relation, FDI is the need of the hour. To do so we need to expand our tax net rather than the tax rate itself. To do so we must begin documenting those unlicensed, cash-based traders that operate in the grey sectors of the economy. Excessively high commercial taxes might undermine this process by discouraging these businesses from entering the formal economy. Furthermore, the government should prepare a satisfactory strategy to ensure that larger tax collections are fairly distributed to those who need it most. It is the moral obligation of the state to balance the needs of the lower socio-economic classes with the overall growth and stability of the economy.

Muhammad Azwar

Rajanpur