Home Views & Opinions Post-IMF – Way foward (3)

Post-IMF – Way foward (3)

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It strange the major beneficiaries of tax reliefs and subsidies are the industrial and trading sector. Ironic , they are least tax payers. Some are filers on paper but they know how to evade taxes. Whereas , every town , small cities and big cities have hundred and thousand business. But 99 percent do not pay income tax , it is this sector , the service sector , about 88 percent is always evade any fiscal discipline . Now that in the present budget when some discipline is enshrined , virtually all segments of service sector is up in arms. It is , they who want maximum subsidies and benefits but are not prepared to share the responsibility and be documented. In the long run fiscal disciple will bring benefits maximum to this sector. Unfortunate, a la political expediency , the previous regimes have been using them for their own agenda. Sinister propaganda go on.
Shaukat Aziz can not be excused putting the country on the path of consumerism. The easy money through trading strangulated small and medium industry , which could not compete with cheap goods from China and India. Import of vegetables (mostly under invoiced) and fruits played havoc with small farmers in Pakistan . Similar is the case with medicines, and auto parts. Our Pharma industry and traders , simply imported cheap quality medicines , raw material from India / China and marketed the same . Similar is the case with auto parts smuggling and cheap quality imports crippled Pakistan’s vender industry of auto parts , they became slaves of big three to supply sheet metal and plastic parts . Very few parts involving high technology are produced in Pakistan as against India and many other countries where regulations force all major car brands to produce major chunk of parts in India / locally and ensure technology transfer. Some of the fast growing industries in engineering sector, carpet , surgical parts , cotton based industries, fabric value addition, electric parts , etc , the list is long all got shrunk and our exports went down as against imports. Culture in political governance allowed this but also to suit their agenda / corruption. Suppressed US dollar value allowed import , along with under invoicing, to increase phenomenally (67 billion) in 2017. This rightly said , increased Pakistan!s foreign debt to present dangerous level.
Over and above , as the business in not documented, service sector majority do not deposit sale or any other levies which it collect. It goes to the pocket of traders and SMEs . The corrupt tax officials facilitate for obvious returns.
Therefore, the present moves of the government are not liked and every effort are made to avoid regulatory regime. The strike by traders is the continuation of the same . They simply do not want to be registered and documented.
Same is with SMEs . Unfortunately disgruntled political elements are encouraging them so as such elements who has suspicious foreign support in media is airing fake crisis . Fortunately, nation has seen their true colours and not supporting them. It is time Government should call their bluff and implement policies is a manner that the performers are rewarded both in export and domestic manufacturing sectors , on performance criteria . Like bonus schemes.
In other countries even kiosk or hand cart ought to get resisted. It is time we as nation should rise and take on responsible behaviour. Simultaneously, reforms in FBR be expedited, an up hill task. FBR should open or give franchise , facilitation desk in every commercial are to submit tax returns both sale and income tax. There and then tax deposit invoice be issued and they be free to deposit through bank , post office , ATMs and even scratch cards. It will make easier and hassle free. So as their fear of tax man be alleviated to great extent. Respect be accorded in various ways to large companies/ individual tax payers .
There is immense potential in Pakistan, what we need , as a nation, to understand our responsibility to and establish fiscal discipline.