Need for widening tax net stressed

KARACHI: Depending on salaried class and organised sector for tax to GDP ratio is not a positive sign for economic growth of the country. It has to include retail, real state and agriculture, which is a pressing need of the day, said Ateeq ur Rehman, economic & financial analyst.

He said privatisation is getting inevitable to get rid of liabilities and losses in major public sectors of the economy. “Our financial sector cannot bear the enormous burden of payables and accrued amount incurred through losses and idleness of state owned unprofitable entities.”

The pilling up of circular debt of electricity is another burden of our economy, which has become one of the sources of extremely high energy tariffs.

The industrial tariffs are rising rapidly and consequently about half of production expenses of an industry are comprised of the electrical costs, added Ateeq.

Another economic misfortune is the rise of petroleum prices, impacting on the charges of public and goods transports, subsequently increasing the inflationary pressures by expensive cost of doing business/ production. The logistics, shipping, multimodal transport and supply management have become more & more expensive with every passing day, he said.

Very high interest rates are not only adding to the cost of working capital but also discouraging investment in expansion capacity and have become challenge for business and industrial community, he said, adding we continue to see a fall in our large and small scale manufacturing which includes textiles, automobile, iron & steel products, electrical equipment, POL refining, pharmaceutical industry, cement industry, engineering industry, chemicals, etc.

Previously it was decided that purpose-built warehousing, cool chains and processing units shall be given the status of industry, but nothing has been done so far in this regard, said Ateeq.

In order to achieve the targeted goals of exports by $60 billion, remittances by $32 billion and increasing the size of the local economy by $350/ $400 billion, we have to consider the points discussed above, he said.

Copyright Business Recorder, 2023