“Overhauling the tax system can ensure inclusive economic growth”
ISLAMABAD: reorganize the tax system from regressive to progressive by changing the culture of the Federal Tax Council (FBR), improving agricultural yields, increasing investments for water conservation and ensuring political support for small and medium-sized enterprises (SMEs) – will lead to an inclusive economy, said Shahiad Kardar, vice-chancellor of Beacon House University.
Speaking at the Sustainable Development Policy Institute (SDPI) Symposium on “Inclusive Economic Growth, Risks, Challenges and The Way Forward for Pakistani Economy” in Islamabad, he said the structure of the economy has changed and as new growth emerging the sectors are finance, IT, automotive and those capital and skill intensive. He called for removing export biases allowing participation in the global supply chain and expanding the net tax base. He suggested that the producer-driven product chain, the buyer-driven approach and facilitation of the service sector, and the increased role of the private sector will be essential for inclusive economic growth. Short-term initiatives are needed to reduce imports by banning imports of certain luxury items like cars and cellphones, he added.
PTI MP Shandana Gulzar Khan said Pakistan was among the countries subject to sovereign debt failure, where many countries did not survive, but Pakistan did because of policies, appropriate planning and resilience of the country. Now the investment is in FinTech venture capital financing. A record funding level of $ 85 million by June 2021 has been received. The businesses are small and innovative and most of the young people are behind these businesses, she said. SDPI Executive Director Dr Abid Suleri said one of the main risks to inclusive growth is “Omicron, the new variant of COVID 19 that is once again shutting down various sectors.” The collective loss from Covid-19 has been huge, but Pakistan has performed relatively well in terms of economic recovery. Energy prices are the second big challenge for international markets and Pakistan. “I don’t see inflation going down over the next six months, the government can improve the purchasing power of the population by creating employment opportunities and providing targeted subsidies. We cannot ignore developments in our social sector, ignoring climate change will affect us negatively, ”he said.
Pakistan Institute of Chartered Accountants, ICAP President Ashfaq Tola said taxation is about fairness. In this part of the region, we look at taxation from a different perspective. “Our main focus is the tax-driven economy, this reverse direction gets us nowhere.” Tracing the history of tax reforms in Pakistan, he said aggressive action is needed to widen the tax net to include agriculture, capital gains, services and the informal sectors. He suggested eliminating all or most tax expenditures and tax exemptions by moving from flat-rate taxes to more adequate and systematic taxation of individuals and corporations. We need to invest in computer equipment and software related to tax collection, he said.
Dr Sardar Mohazam, Director General of the National Authority for Energy Efficiency and Energy Conservation, said there is a need to innovate in energy access which has different areas and can lead inclusive economic growth. He said renewable energy sources should be encouraged to increase access to various sources including solar and others. He said that because of the gap between energy supply and demand, we have to manage it through load shedding. Renewable energies make access to energy possible, thus making it more inclusive by focusing on the climate agenda. This agenda focuses on the mitigation part of climate change. Syed Javed Hassan, chairman of the National Commission for Vocational and Technical Training, said there is a need to replace the old industrial approach with a more incentive one to bring sophistication to the structural makeup of the country.
We need to transform and make resources flexible to move from one activity to another economic activity. We have to overcome the limited scale of the internal market by integrating it with regional and global markets. We must invest in young people and women