The tax authority’s move to block SIMs of non-filers is a futile exercise to generate revenue from the country, it may increase a few number of filers, but not tax income, said Ashfaq Tola, State Minister for Revenue while addressing a seminar on budget ” Pakistan Economy” at Karachi Press Club.
There are nearly 7.5 million NTNs in the country, whereas the number of filers stood merely at 3.5 to 4 million and many of them file zero tax returns. There are various other ways to generate taxes from the potential sector including real estate, agriculture, and retail in collaboration with provincial tax authorities.
He said that government employee pension should be capped at above Rs. 0.5 million or taxed in the upcoming budget. In the upcoming budget, the new taxes of around Rs. 1300 will be imposed including food items except wheat and rice, which will ultimately fuel the inflation in the country.
He mentioned that the Rupee will remain under pressure in the coming months and may go above the 300 mark against USD which also pushes up the overall inflation in the country, unfortunately. The next IMF program will be very tough for the country, instead a country could reform its economy through a homegrown plan and strategy, he added.
Ashfaq Tola, a former Chairman Institute of Chartered Accounts of Pakistan (ICAP) further suggested that Pakistan could not afford commercial loans from different countries but financial rollover programs from friendly countries would give relief to its economy. The agriculture sector’s performance, mainly food crops and cotton maintains a reasonable level of production to meet the requirements of the country, which is a good sign for economic recovery, he added.
He said the government should control imports of the country by inhibiting inflows of luxury items and unnecessary goods, on the other hand, there is a need to pace up import substitution, which ultimately ease the pressure on the current account. The policy rate should be eased off gradually to stir economic activities and lessen its impacts on local debts adding to Rs. 464 billion only with the increase of one percent in the policy rates.
The former State Minister said the GDP is likely to sustain low growth, however, the reforms and improvement of macroeconomic indicators may accelerate GDP growth rate in the coming years. One percent growth in GDP roughly generates 0.3 million jobs, he remarked.
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