KARACHI: This is with reference to Shahid Javed Burki’s article “Top priority: the economy” (May 6). There are basically three vectors to turning around Pakistan’s economy: 1) massive improvement in the tax-to-GDP ratio; 2) reducing expenditure, including losses from state-owned corporations and 3) investor confidence in the country.
The tax-to-GDP ratio can be increased by placing honest and dedicated officers in the Federal Board of Revenue (FBR) and giving the organisation complete autonomy. At present, the FBR has become dysfunctional. If the tax-to-GDP ratio needs to be improved beyond 12 per cent, it can only happen if the capacity of the provinces to collect taxes is enhanced. All income irrespective of the source needs to be taxed
Secondly, state-owned corporations are inefficient and most of them are bleeding with losses and waste, e.g., PIA, the Steel Mills, etc. They need to be run like propoper businesses and may even be privatised. The loot and plunder that goes on in certain organisations needs to be stopped.
With a new government in place, hopefully there will be good governance. This will give confidence to key stakeholders in the economy. Look at all the textile industries that have moved to Bangladesh, Vietnam, etc. Pakistan needs to seriously look at the way it manages its debt, which will drain away 70 per cent of our tax collection in years to come.
HA Khan
Published in The Express Tribune, May 7th, 2013.
