Industrialists and traders are not overly optimistic about the budget, scheduled to be announced on Friday June 1 (today). However, some industrialists expressed the hope that the budget might carry some relief measures for general public as it is the current government's last budget. They said that it would reflect the government's four-year performance, adding that it would herald the opening of its election campaign.
Pakistan, industrialists and traders agreed, had consistently been facing a tough situation both in terms of revenue and economic growth. They were unanimous that both had suffered because of varied domestic and foreign issues. Urging the Federal Board of Revenue (FBR) to tap new sources, they said that the FBR should enforce strict tax compliance, plug loopholes in taxation regime and broaden the tax-net for achieving its target.
Significant economic sectors, they said, were still not in the tax net or they were not contributing to the national exchequer in fair proportion. The business community, they said, believed in having an equitable, just and transparent tax policy imposed on all sectors of the economy without any discrimination, effectively distributing the burden of taxes.
They said that it was necessary to take effective measures against under-declaration and tax evasion to broaden the tax base. According to them, Pakistan, despite having one of the highest tax rates in the world, the country was ranked among countries with lowest tax-to-GDP ratio. Major reasons being a lack of resources and weaknesses in documentation, they said, adding that services, agriculture and manufacturing sectors' contribution was negligible in terms of taxes paid.
Economic unrest was compounded by frequent power failures, deteriorating security situation and inconsistent tax policies. These factors, they said, not only hampered the industrialisation process, but also posed a great threat to the profitability and survival of small- and medium-scale enterprise sector and Foreign Direct Investment.
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