State revenues: Low tax-to-GDP ratio hinders development

PM aide says transparency has been enhanced in the FBR

ISLAMABAD: Special Assistant to the Prime Minister on Revenue Haroon Akhtar Khan has said that business-friendly policies have resulted in rapid economic development and the country will achieve 6% growth rate before general elections in 2018.

“A low tax-to-GDP ratio is hampering development for which we are trying our best while enhanced transparency has been ensured in the Federal Board of Revenue (FBR),” he said while talking to business community at the newly constructed building of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Wednesday.

FBR Chairman Nisar Muhammad Khan and FPCCI President Abdul Rauf Alam were also present on the occasion.

Stressing the importance of tax collection, Khan said the US was a super power because of its good tax system while Europe was considered a developed region due to good taxation, therefore, the Pakistani business community should also meet its obligation so that the country could develop at a fast pace.

He said a lot of incidents of tax evasion are being reported but very few cases result in legal action. “Those who pay tax after detection face no action at all,” he added.

Business friendly government is collecting tax on one-fourth of the real value of property while a number of sectors  including fertiliser have been given tax breaks which has resulted in good growth, he informed.

“Economy is generally doing well, international institutions continue to praise economic policies, private sector off-take has multiplied, interest rates are at the lowest while lenders like Asian Development Bank are ready to provide loan at less than 2%.”

According to Khan, the government has not transferred burden of higher oil prices to the masses for five months resulting in lowest oil prices in the region. He added that investment and fund transfer to other countries is getting difficult therefore the business community should invest in their own country.

“Debt-to-GDP ratio in Pakistan is at comfortable level while average interest payable on debt is 3% which is not worrying,” he informed. He lauded the services of FPCCI President Abdul Rauf Alam for making FPCCI Capital House in Islamabad operational which is a facility of international standard.

Published in The Express Tribune, November 17^th, 2016.

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