Need for increasing tax revenues
State Bank of Pakistan has called for measures to increase tax revenues with a focus on the structural problems in the fiscal system and not be guided by expediency. Taxation reforms "should address the following issues: (i) widening the tax base by eliminating a broad range of tax exemptions; (ii) improvement in FBR's image and clamping down on leakages to minimise tax avoidance and evasion; and (iii) enhancing compliance and strengthening the tax (Second Quarterly Report for FY14) administrative capacity.
Copyright Business Recorder, 2014
Similarly, broad-based reforms in the energy sector and restructuring of loss-making PSEs, are the prerequisite to contain the fiscal burden and create space for undertaking development spending. The needed revival in public investment is likely to crowd-in the private sector by expanding opportunities for it. In addition to all these issues, internal security concerns continue to disrupt domestic economic activities. Without a solution to these challenges, it will be very difficult to revive domestic investment, which is required to put the country on a high growth path.