It is difficult for Pakistan to get the required loan from the IMF: Mian Zahid Hussain.

Mian Zahid Hussain, the Chairman of National Business Group Pakistan, the President of the Pakistan Businessmen and Intellectuals Forum, the All Karachi Industrial Alliance, and a former provincial minister, stated on Monday that Pakistan would not receive the required amount of loans from the IMF due to poor revenue collection and lack of reform. He said that Pakistan must fulfil all the stringent conditions of the IMF to get the required amount, which is politically difficult.

Mian Zahid Hussain stated that expanding the tax base to appease the lender would not be acceptable to tax evaders and could lead to issues for the government, ultimately impacting its popularity.

The veteran business leader warned that if the provinces don’t collect their required taxes, the centre will have to increase the burden on current taxpayers to increase revenue.

The business leader stated that the provinces’ non-cooperation has resulted in the failure to collect taxes on agricultural income, GST on services, and municipal tax as required. Consequently, the central government has increased the burden on the salaried class, pensioners, and other taxpayers.

In addition, efforts are underway to tax rental income, bonds, stocks, property, wholesalers, and retailers. Still, he stated that broadening the tax base would be preferable rather than burdening existing taxpayers more.

According to Mian Zahid Hussain, expanding the tax base should target sectors that are not paying taxes. He said that in developed countries, taxes are imposed on the rich, the middle class is promoted, and the poor class is helped, whereas it is otherwise in Pakistan. Taxpayers in developed countries receive better education, healthcare, security, and other services, but this is different in Pakistan, which disappoints those who pay taxes.

He pointed out that authorities constantly target the salaried class, while those in their families who work in trade earn more with less effort and pay no taxes. In this manner, individuals become disenchanted with the tax system and attempt to evade it. It also leads to the exodus of numerous educated individuals from the country. He said it is easy to target the salaried class. Still, it is difficult to find and collect taxes from non-taxpayers, so the tax authorities take shortcuts that negatively affect society.

Mian Zahid Hussain said that the documented economy is continuously shrinking due to loopholes in the tax system while the underground economy is flourishing.

He noted that many employees have started demanding their salary in cash instead of checks to avoid taxes. Increased taxes on the documented economy will decrease production and output, thereby increasing the profitability of undocumented businesses. He said the size of the black economy will continue to increase due to the wrong priorities.

An annual tax of Rs 14000 billion is needed, but due to the non-receipt of the required tax, Pakistan has to resort to debt to provide facilities to its people, which has become an unbearable burden on the economy.

Author

Sharing is caring

Leave a Reply