Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and Former Provincial Minister Mian Zahid Hussain on Monday said it has become impossible to run the country without new loans.
Pakistan cannot get cheap loans from the international market unless it complies with all the IMF conditions, he said.
Mian Zahid Hussain said that withdrawing tax exemptions and increasing tax on certain items has become necessary but essential items should have been spared to protect the masses.
Talking to the business community, the veteran business leader said that Pakistan must repay loans worth 12 billion dollars this year as the mini-budget is being objected to but no solution is being given by the critics.
He noted that it has become necessary to swallow this bitter pill, otherwise the country will default.
Mian Zahid Hussain further said that it was wrong to impose a tax on essential items which should be reconsidered. The imposition of a 17% sales tax on cotton would affect the textile industry while the imposition of a 17% sales tax on the solar energy sector would also hit the efforts for the development of alternative energy in the country.
Imposing a 17% sales tax on seeds will affect farmers and make agricultural commodities more expensive and sales tax being levied on milk for infants will further aggravate the problem of food security in the country.
He noted that many children in Pakistan are already deprived of proper nutrition and imposing such taxes will increase the incidence of malnutrition which is very dangerous for the future of the country.
The veteran business leader said that unnecessary focus on sales tax will increase poverty in the country as tax collectors do not have to work hard to collect it while direct tax collection is being ignored because of some hard work associated with its collection.
Mian Zahid Hussain further said that lavish expenditure, wrong priorities and irresponsible economic policies have brought the country to the brink of disaster.
In 2018, loans from local sources were Rs16.5 trillion which has been increased to Rs27 trillion. In three years, foreign debt has increased from $95 billion to $137.74 billion, and this trend continues.
Pakistan recently secured a loan from Saudi Arabia on the strictest terms in the country’s history. However, this loan did not strengthen the rupee to the expected.
As long as political interests continue to be given priority over national interests and policies that contradict the ground realities continue to be planned the economy of the country will remain in the dismal state as it is now while the sufferings of the people will continue to increase, he said.