LAHORE: Former Federal Finance Minister and renowned economist Dr Hafiz A Pasha has said that promotion of exports, increase in tax-to-GDP ratio, revenue collection from the untaxed and a crash program for the diversity of loss-making state owned enterprises is a must to get rid of the severe economic challenges being faced by the country.
He was speaking at the Lahore Chamber of Commerce & Industry. LCCI President Mian Nauman Kabir presented the address of welcome, while Senior Vice President Mian Rehman Aziz Chan and Vice President Haris Ateeq also spoke on the occasion.
Dr Hafiz A Pasha said that the last year, the biggest burden of Rs1800 billion in the history on the national exchequer was collectively caused by the state owned enterprises. “Power sector is a black-hole that is destroying the economy,” he said and added that the annual loss of National High-way Authority is Rs173 billion.
He said that there is a dire need to enhance the tax-to-GDP ratio which is currently lowest in the world. He mentioned that 22 percent of the agri land is in the hands of only one percent landowners. He said that last year the income of top-20 percent agri land owners was Rs2800 billion but they paid only Rs2 billions tax. He said that the 80 percent of the tax is being collected from the industry while the tax collection from services sector is very low.
Dr Hafeez Pasha said that Pakistan is a resource-rich country whose economic condition is deteriorating. He expressed fear that before receiving money from the IMF, the foreign exchange reserves will have gone below 7 billion dollars, although the safe level is 18 to 19 billion dollars. He said that public debt in July was around fifty trillion rupees while the ratio of external debt to GDP has reached 41 percent. Five years ago, these loans were 83 billion dollars, which today have become 130 billion dollars. It is a matter of concern that we do not have foreign exchange reserves at the beginning of the financial year.