Dar floats idea of developing charter of economy

Dismisses rumours of levy of another tax, terms country’s tax-to-GDP ratio worst

LAHORE:

Finance Minister Ishaq Dar has suggested that the country needs a charter of economy with the support of all stakeholders in order to achieve best results from the efforts made to put the economy back on track.

However, he said, there were some people who were not happy with these developments and were creating hurdles in the way by engaging in a propaganda campaign.

“They want Pakistan not to take its own decisions and keep taking dictations from the lenders,” Dar commented while speaking at a seminar on Islamic banking on Saturday.



“We are trying to increase our income by taking various steps, especially tax collection, and will continue to make efforts to make Pakistan a sovereign country.”

He dismissed the rumours that the government was going to introduce another tax, terming them baseless.

The recent Rs40 billion worth of additional taxes were on imported luxury items, but many profiteers had pushed up prices of local products as well, he pointed out. “I have already talked to provincial authorities and asked them to take strict action against the wrongdoers.”

He called global financial institutions self-serving as they avoided doing business with countries that could not generate enough income. “If these institutions are declaring Pakistan as good for business, it means we have done some better work,” he said.

Dar, however, reminded that Pakistan was still the worst country in terms of tax-to-gross domestic product (GDP) ratio.

“We want everyone, especially small traders, to help increase our tax collection and will facilitate them in every manner,” he said, stressing he would make improvement in the Federal Board of Revenue and would encourage traders to deposit half of the money that they were giving to corrupt officials in the national exchequer.

“I will appreciate the traders who name such officers so we could deal with them accordingly.”

About growing foreign currency reserves, Dar voiced the hope that these would touch $21 billion in the first quarter of 2016 compared to the current $20.4 billion, of which the State Bank of Pakistan had around $16 billion.

Turning to Islamic banking, Dar said the government’s goal was to switch to Islamic banking, but it could not be done overnight. “We already have formed a committee that will give recommendations and we will act accordingly. However, the process will take time.”

He asked the Islamic banks working in the country to lend money to small and medium enterprises and the housing industry. There were many other sectors like agriculture where Islamic banks could enter to strengthen their roots and beat the commercial banks, he said.

Speaking on the occasion, MCB Bank Chairman Mian Muhammad Mansha cautioned that things needed to be addressed wisely as 2016 would prove to be much tougher because of greater challenges like generating employment opportunities for three million people that were entering the ranks of workers annually.

He recalled that his bank was the first that opened an Islamic banking window, but “since then I have also realised that we could not run a proper Islamic banking division within the bank because the issues were quite different, including the nature of customers as well as religious beliefs of people. We also gained some experience with investment in Maybank which came in 2008.”



However, he said, “with the help of the State Bank governor and deputy governor, we came with a plan that probably every bank needs a complete subsidiary to have independent banking. We applied for a new bank and the first branch of the bank was opened about a fortnight ago.”

Published in The Express Tribune, December 13^th, 2015.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.