Former Principal Economic Adviser Ministry of Finance Sakib Sherani has said that the upcoming federal budget (2016-17) would be for a period of three months and once we are out of the International Monetary Fund (IMF) programme in September there would be another budget. He was speaking as a guest in 'Paisa Bolta Hai' of Aaj News with Anjum Ibrahim here on Sunday.
Sakib Sherani said that the tax system is inequitable where people have opted to remain out of the tax net. Tax base is even becoming narrow. On the other hand, the capacity of the Federal Board of Revenue (FBR) has weakened and the government is unable to introduce tax reforms and broaden the tax base.
About the upcoming budget, he said, "The budget would be tight and all numbers would match". The budget would be for a period of three months and then the government would come into the election mode. After three months, they would talk about new taxes and there would be another budget. As far as development is concerned, the government would be fully focused on development projects to win the elections and divert the attention of general public from Panama leaks.
Sakib Sherani said that there was no focus of PPP in development projects. In case of PML (N), people can see implementation of projects on the ground. In 2018, a 4000MW project may be completed. Thus, people would see projects on the ground.
He said that the people have adopted wait and see policy about the impact of Panama leaks on the government. In the longer term, the institutional framework of Pakistan has been shown in a poor light where you have seen so much money going out of the country. People think that there is no law to bring the money back and how to investigate the matter of Panama leaks, having negative sentiments of the general public.
Former Finance Minister Dr Salman Shah said that the development would not make them win or give them victory. The actual issue is employment generation as private sector is not making new investments in the country. The people would realise that there is no development or employment generation, but the government functionaries are saving money in offshore accounts. A debate would generate in Pakistan on the issue of offshore accounts and I think that the present government may loss elections like PPP lost last elections.
He claimed that there are commissions and overestimation in all the projects being established in the country. Reportedly, Mexico recently accepted a tender of solar power at Rs 4 per unit whereas a power project at Bahawalpur is selling electricity at very high cost, reflecting a huge difference.
Dr Salman Shah was of the view that the financial management system of the country is totally collapsed. At present, there is a huge gap of Rs 500-600 billion in potential of taxes and actual tax collection of the FBR. On the spending side, the government is spending around $60 billion per year. If 10 percent of the said amount is misappropriated, this 10 percent is a huge amount. Some amount of black money and corruption remain inside Pakistan but most of the amount has been transferred to offshore companies aboard. The politicians need resources outside the country if they would to go abroad. This kind of practice has been witnessed in most of the third world countries.
Dr Abid Qayyum Sulehri, Executive Director Sustainable Development Policy Institute (SDPI) said that there is nothing new in Panama leaks. People already know about their investments aboard. Both in the cases of present political regime and past government, people are already aware about their foreign investments. As per SDPI political barometers, corruption has not been considered as a major factor while casting votes. The voting pattern is entirely different.