LCCI urges private sector to take part in budget-making process

The Lahore Chamber of Commerce and Industry (LCCI) on Thursday urged the private sector participation in the budget-making process for ensuring the effectiveness of public spending, efficiency in services and accountability.
The LCCI President Irfan Qaiser Sheikh said that there is no doubt that in Pakistan, private sector participation and access to information on budgetary matters is very limited unlike developed economies and the business community has little trust in the taxation and public spending.
He said that many willing taxpayers often avoid full tax compliance because they do not consider the resultant quality of public services and the ultimate result is low tax-to-GDP ratio. In case of Pakistan, the tax-to-GDP ratio is at below 10 percent, one of the lowest in the world.
Sheikh said that the country desperately needs to improve tax-to-GDP ratio. The LCCI supports fiscal decentralisation to make devolution more meaningful. It is crucial to take advantage of political and administrative decentralization. He mentioned the LCCI supports increasing reliance of public-private partnership especially in infrastructure development. Currently, there is no mechanism at the provincial level for seeking input from key stakeholders. The budget-making process is one-sided having no formal or informal consultation mechanism for engaging citizens and representatives of the private sector.
He said that the budget-making should be based on four key principal including participation, transparency, efficiency and accountability. He said that both formal and informal consultation between the government, private sector, academia and civil society should take the centre stage in budget-making process.
"Trade bodies are considered part and parcel of economic governance of any country. Trade bodies in Pakistan are increasingly becoming aware of their role in this regard. But their potential in provincial budget-making remains untapped" he added. The LCCI President suggested that to improve the effectiveness of the provincial budget-making process, Provincial Budget Offices (PBOs) should be established to work as a fully functional budget making unit. PBOs should ensure full transparency of provincial fiscal affairs at all times and also conduct pre-budget and post-budget meetings with leading trade bodies.