LCCI for adopting new ways to cut fiscal deficit

Says govt needs to control administrative expenses, expand tax net

LAHORE: The Lahore Chamber of Commerce and Industry (LCCI) has called for adopting a new and sustainable methodology to defeat the challenge of budget deficit instead of depending on conventional ways like huge borrowing or burdening the existing taxpayers.

The budget deficit is among major economic indicators and unfortunately Pakistan’s deficit has always shown a discouraging picture, said LCCI President Abdul Basit and Senior Vice President Amjad Ali Jawa in a statement.

They said governments had chosen an easy way of borrowing and burdening the existing taxpayers to bridge the gap between spending and revenues. Resultantly, a major part of the budget is allocated for debt servicing.

Pakistan recorded a budget deficit of 4.9% of GDP in FY16. The LCCI office-bearers urged the government to cut its non-development and administrative expenditures to reduce the fiscal deficit, adding administrative expenses must be controlled.

They said debt servicing was a major non-development expenditure, which was hindering economic growth. Hence, there was a dire need to cut these non-development and non-productive expenditures.

The LCCI officials suggested that the government should expand its tax net instead of burdening the existing taxpayers in a bid to increase revenues and help reduce the budget deficit. They said in order to reduce the fiscal deficit the government would have to use a combination of policies as methods like huge borrowing and burdening the existing taxpayers had created various challenges for the economy.

Published in The Express Tribune, June 2^nd, 2017.

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