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Published Date: Apr 27, 2017

Direct tax regime should be introduced

The national economy is sinking into the swamp, owing to ill-conceived policies and misplaced priorities, Pakistan Tehreek-i-Insaf (PTI) MNA Asad Umar said on Wednesday.
Speaking at a ‘Pre-budget discussion’ at the Sustainable Development Policy Institute, Mr Umar said the situation can only be improved by introducing a direct tax regime and reducing the current GST rates.
He said the country’s economic system was designed to protect and facilitate theft by society’s influential and powerful figures, which was why the tax collection machinery is heavily corrupt and needs to be reformed and to be made autonomous. He said Pakistan’s current deficit touches $6.1 billion, while exports have seen a decrease for the first time in history.
“The government should decrease indirect taxes and the GST rate should be brought down to 15pc,” he said, adding that the country’s economic activities have slowed due to anti-growth and anti-industrialisation tax policies while purchasing power has been reduced to a few hands. He said even international financial institutions have said the level of disparity is harmful to economic growth.
During a Q&A session, Mr Umar said Pakistan needed development professionals to ascertain the people’s needs. He said after debt servicing and allocations such as defence budget expenditures, nothing is left for the development sector.
He added that since revenue collection needs to be enhanced, it should be done through a direct tax regime.
Speaking earlier, the institute’s deputy executive director Dr Vaqar Ahmed highlighted the importance of tax harmonisation between the federal and provincial tax systems.