Haroon Akhtar Khan, Special Assistant to Prime Minister on Revenue Monday advised the authorities concerned to keep national interests supreme while finalizing the negotiations on China Pakistan Free Trade Agreement (CPFTA) second phase. He was addressing a pre-budget seminar arranged by Pakistan Businessman and Intellectuals Forum (PBIF) here.
Haroon said Pakistan's domestic industry is largely dependent on imports as the country remained unable to enhance its indigenous import alternatives for the last few years. The first phase of an FTA between Pakistan and China has expired; its 2nd phase is now being considered by both governments. However, he said Pakistan should carefully sign the agreement with taking all the stakeholders on board as it would have a significant impact on the amount of trade between the two countries.
He underscored the need for safeguarding Pakistani indigenous industries, particularly the manufacturing sector, and the economy from any undue pressure on the balance of payments position. The representatives of various associations on the occasion urged the government to protect the local industry from Chinese imports by disallowing tariff concessions on several products.
Reports suggest that Pakistan China FTA, which was signed back in 2006, has left the local traders at a disadvantage against their Chinese competitors. Between 2012 and 2017, for example, Pakistan's trade deficit with China tripled, going from $4 billion to $12.7billion.
Haroon also said that the incumbent government has streamlined the Federal Board of Revenue with setting standards for merit, integrity and reforms within the board. Hailing the efforts of FBR officers, he said that Rs 4.03 trillion revenue collection targets has been fixed for this year and it would be achieved. Tax-to-GDP has also witnessed a significant improvement in last five years from 9.5 percent to 12.5 percent.
The multi-billion China Pakistan Economic Corridor (CPEC) would open avenues for the local businessmen in various sectors. He emphasized upon the enhancement of revenue saying the nuclear country would not become an economic superpower as long as it does not improve its revenue base. "Tax evasion is prevalent in the country," he said, adding that a number of filers are evading tax while the list of non-filers is also too big.
He said the current account deficit is the biggest challenge. He said the government has maintained rupee value for the last couple of year. However, this year, it depreciated it by 5 percent but that would not stoke inflation. The government-proposed tax amnesty scheme will benefit the country as the formula has successfully been experimented by India and Indonesia, he said.
Haroon said that consistent policies are required for attracting long-term investment and sustainable development of the country. President PBIF Mian Zahid Hussain said the country's economy is now on right track due to the better policies of PML-N government. He said law and order, and energy were the core issues of the country a few years back. However, the government has almost resolved the issues. The country's exports have witnessed a 12 percent increase this year. Mian Anjum Nisar, Zakaria Osman, Zafar Iqbal and other businessmen put forward recommendations to the minister for the upcoming federal budget 2018-19.
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