‘No marked improvement in economy likely’

Govt asked to impose tax on middlemen and elite.

KARACHI:

The economy will not achieve any marked improvement in the upcoming financial year even if the government manages to meet the revenue target of Rs1,952 billion, says a tax expert.

“Pakistan is facing a revenue shortfall of Rs700 billion which we cannot recover by reaching the target of Rs1,952 billion in 2011-12,” said Shabbar Zaidi, partner of chartered accountant firm AF Ferguson and Company.

He was speaking at a post-budget seminar organised by the Institute of Cost and Management Accountants of Pakistan (ICMAP) on Wednesday.

“The country has to tax the income of middlemen and the elite to collect Rs700 billion, otherwise we cannot address our financial problems,” he said.

Pakistan has always been an elitist economy, which never safeguarded the interest of common man. Citing latest western books, he said “Pakistan is not anywhere in future but what we may lose is our poor people who do not have two meals a day,” he said.

Talking about direct and indirect taxes, he said “tax experts need to push the government to increase direct taxes and reduce indirect taxes.” He said the government should not impose general sales tax (GST) on machinery import because the domestic industry was not properly regulated and the GST would impede fresh investment.

Pakistan Tax Bar Association’s former president Abdul Qadir Memon said the country could not reduce its expenses, so it had no option but to increase earnings. He said the reduction in withholding tax from 0.3 to 0.2 per cent was not a feasible decision as the government would earn only Rs3 billion from this tax.

Published in The Express Tribune, June 9^th, 2011.