Speakers at a pre-budget seminar held here on Monday said that concerted follow-up of the reforms programme, superior economic governance and bold strategic decisions have brought economic turn-around in the country.
Lahore Branch Council of Institute of Cost and Management Accountants of Pakistan organised the seminar, while Lahore Chamber of Commerce & Industry (LCCI) President Mian Shafqat Ali, Lahore Stock Exchange (LSE) former president Dr Yasir Mehmood, Rasool Textiles (Pvt) Ltd, CEO Khalid Rasool, ICMAP President Sher Afgan Malik and Athar Azeem delivered speeches.
The speakers maintained that there was substantial increase in foreign direct investment, as foreign investors had started taking long-term positions.
They said: "although the per capita income has been on the increase, our main problems remain poverty reduction and unemployment."
"In order to keep the tempo of development on, we should remain consistent in policy formation, live within our means, do not expose ourselves to ballooning debts, work to improve systemic inadequacies, respect sovereign commitments and guarantees, remove income disparities, ensure implementation of rules and regulations and adopt transparency and accountability in all spheres of life," they said.
Appreciating growing trend in revenue collection, they said that tax GDP ratio is lop-sided, which invites government attention. The tax structure needs to be rationalised so that each sector could contribute to revenue collection in correspondence with its share in GDP.
Despite the fact that agriculture sector contributes 24 percent to GDP, insignificant amounts are paid by the agriculturists in taxes. The sales tax might be charged only at the time of sales and not only on raw materials. The taxation laws and procedures need to be simplified, they said.
Apprehending that gas reserves are going to be exhausted by 2015, they stressed the need for arranging procurement of gas from Iran, Turkmenistan and Qatar etc.
In the interest of investment and industrialisation, they stressed that interest rate and export refinance be kept in check. Especially the export finance rate should not be more than 4 percent.
It was also brought into focus that we are suffering from water shortage, which is adversely affecting our crops. The only remedy for this problem is building new water reservoirs, they said.
"Our policy should be structured to ensure that the GDP growth remains around 8 percent, low interest regime continues with single digit inflation. The government should adopt the policy so that taxation and utility rates and other tariffs etc, are rationalised to keep up the competitiveness of our product."
Agriculture sector needs special attention for beefing up its performance by elimination of water scarcity and management and timely provision of other inputs. "We should avoid dollarisation of our economy by keeping the exchange rate stable", the speakers said.
About tax dispute resolution, one of the speakers suggested that dispute resolution committees might be vested with powers to make final decisions on the disputes instead of playing a recommendatory role according to the existing law in force.
Speaking on the occasion, Khalid Mahmood, Chairman, Lahore Branch Council, said, "our tax set-up is more pro-rich than pro-poor. Resultantly, the rich pays less tax than they should and the poor are compelled to pay taxes despite of the fact that they have very low capacity to pay."
He said that since its promulgation, numerous amendments had been made in "Income Tax Ordinance 2001" yet complications and complexities are still there. The tax system needs to be simplified to make it people's sympathetic especially for the poorer ones.
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