Deep reforms agenda proposed
The BOI secretary said that economic uplift was an area of priority for the government, which was introducing economic reforms to increase the confidence of business community. Photo: File
The Pakistan Institute of Development Economics (PIDE) on Saturday launched the Economy Festival 2024 to promote research for social transformation and advancement.
PIDE, in collaboration with the Research for Social Transformation and Advancement (RASTA) programme and the Pakistan Society of Development Economists (PSDE), inaugurated the third Economy Festival – EconFest at the Gandhara Citizens’ Club, Fatima Jinnah Park, on Saturday.
Former Planning Commission deputy chairman and PIDE Vice Chancellor Dr Nadeemul Haque, in his opening remarks, said that PIDE was proud to present a deep reform agenda aimed at transforming Pakistan’s economic landscape.
“Our focus is to dismantle outdated colonial institutions that have long fostered suspicion of markets, imposed restrictive measures such as DC rates, and hindered technological advancement and local research growth,” he said.
Haque said that Pakistan stood at a crossroads, grappling with a government footprint exceeding 64% of the economy, policy uncertainties, excessive regulations, and fixation on the tax-to-GDP ratio that stifled investment and innovation. “Our economy is gasping for breath, and it is imperative to allow people to invest and grow, fostering a society built on trust and opportunity,” he added.
He cited key areas of their reform agenda which included energy, education, urban development, state-owned enterprises (SOEs), the Federal Board of Revenue (FBR), and health. “We emphasise decentralisation, professionalism, and the use of technology and research to drive governance improvements. Excessive job security without performance and the lack of results-based management must be addressed to enhance productivity.”
He advocated corporatisation and privatisation to break the dominance of stunted, Seth-owned companies (SSCs) and a stunted stock market, adding that the stock market should be leveraged for privatisation, promoting growth beyond SSCs and providing clear investment opportunities with simplified taxes, digitised processes, and stable policies for at least a decade.
PIDE Pro Vice-Chancellor Dr Durre Nayab emphasised the necessity for a comprehensive approach to address Pakistan’s economic challenges. She said that PIDE’s agenda targeted key areas including regulatory modernisation, tax reform, market liberalisation, energy sector efficiency, and improvements in agriculture and banking.
A notable element of the strategy was the ‘Regulatory Guillotine’ aimed at eliminating burdensome regulations that hindered business growth and innovation, she said, adding that reforms also required debt restructuring, intensified cooperation with the IMF, comprehensive tax reforms, and strategic economic openings to prioritise exports and modernise import regulations. PIDE Chief (Policy) Dr Faheem Jahangir said that in the realm of tax and administrative reforms, PIDE called for tax simplification and policy certainty, streamlining taxes in a revenue-neutral manner, and ensuring stability for a decade.
This included implementing a uniform tax rate across all income sources, eliminating presumptive tax regimes, and transitioning to advance income tax mechanisms, he added. He said that the plan also emphasised the need for a uniform sales tax system, increased excise duties on harmful products, and automation in tax administration to reduce human interaction and enhance efficiency.
Additionally, he said that PIDE advocated a pro-export trade policy, easing incorporation and listing processes and addressing the over-regulation of Pakistan’s markets to foster an environment conducive to investment and growth. Former FBR chairman Syed Shabbar Zaidi addressed misconceptions about taxes in Pakistan, highlighting that 54% of tax revenue was allocated to provinces, which often showed surplus budgets.
He questioned the accountability of provincial spending, noting that funds were frequently used for luxuries rather than essential projects. He said that a significant portion of federal taxes went towards debt servicing, while provinces also collected their own taxes.
Due to political reasons, the government avoids tax collection, especially in real estate. Zaidi compared Pakistan’s low property taxes to higher rates in Indian cities like Pune, pointing out disparities. Non-taxpayers often question the return on taxes.