Ideas to propel Pakistan out of the economic crisis

[Bewal Express]

hain?

kaisay bhai?

https://www.weforum.org/agenda/2015/07/how-education-can-moderate-population-growth/

"One of the most powerful tools in stemming population growth will be education, says Mark Montgomery, an economics professor at Stony Brook University and a researcher at the Population Council. “We’ve seen some astonishing transitions, especially in the 1970s in what were then poor countries where fertility rates fell when levels of education went up.”

 

[FearlessRoar]

FinMin Aurangzeb stresses ‘rightsizing’ of five ministers

Finance Minister Muhammad Aurangzeb stressed the importance of rightsizing five ministries, including Kashmir and Gilgit Baltistan, SAFRON, Industries and Production, IT and Telecom and Health have been short-listed in this regard.

He said Prime Minister Shehbaz Sharif will take the final decision to this effect.

Addressing a press conference in Islamabad today, he said reforms are being done in the FBR and in this regard weekly meetings are held under the chair of Prime Minister Shehbaz Sharif. He said that putting less burden on lower income class is the government’s top priority.

Expressing gratitude to the Chief Ministers of all four provinces for supporting government’s tax reforms agenda, he expressed hope that they will introduce tax legislations for inclusion of Agricultural sector in the taxation regime.

He said without including untaxed and under tax community into tax regime, we cannot achieve certainty and ease of collection that is vital for economic stability.

Regarding facilitation to the business community, Muhammad Aurangzeb said claims worth 68 billion rupees have so far been now refunded.

The Minister said notices will be sent through a centralized system, while field formations will be authorized to collect taxes accordingly.

Mentioning the details of tax evasions and frauds, he said we have identified a tax potential worth 600 billion rupees that was not collected, out of which one billion rupees has been recovered so far. In customs, through misclassification, tax worth around 50 to 200 billion rupees has been identified.

He urged media to start a campaign against under tax and un taxed community.

The Minister said the government is also working on the simplification of the tax processes to facilitate the business and salaried persons. Through this simplified process, they will be able to respond to our system in a very simple and easy manner without the involvement of any tax consultant.

FinMin Aurangzeb stresses 'rightsizing' of five ministers

ISLAMABAD: Finance Minister Muhammad Aurangzeb stressed the importance of rightsizing five ministries, including Kashmir and Gilgit Baltistan, SAFRON,

arynews.tv

 

[The Bald Eagle]

Dr. Gohar Ejaz, Chairman of FPCCI-PERG and former caretaker federal minister for commerce, shared a series of economic recommendations on his X account on Monday

His post addressed key issues affecting Pakistan's financial stability and growth.

His suggestions come at a time when Pakistan's inflation rate has stabilized below 12% for the past three months, despite persistent economic challenges.

In his post, Dr. Ejaz highlighted the discrepancy between Pakistan's stable currency rates and the State Bank of Pakistan's (SBP) high-interest rates, which have been maintained at 19.5% over the past year.

He argued that these rates, significantly above the inflation rate, are intended to control inflation but at a substantial economic cost.

"The country's total net federal tax collection, Petroleum Development Levy (PDL), and other income amount to Rs10.6 trillion," Dr. Ejaz noted, with Rs 9.8 trillion of this sum dedicated to servicing domestic debt of Rs45 trillion.

He pointed out that high-interest rates have resulted in an additional Rs 3 trillion being paid over inflation-adjusted costs.

To alleviate this financial strain, Dr. Ejaz recommended reducing the policy rate to 12%, aligning it more closely with recent inflation trends, potentially saving Rs 3 trillion in domestic debt servicing.

Dr. Ejaz proposed several fiscal measures aimed at stimulating economic growth and easing the financial burden on consumers. Key recommendations include:

Electricity Rate Adjustments: Dr. Ejaz suggested setting electricity rates at Rs 10 per unit for consumers using up to 200 units while capping rates for other domestic, commercial, and industrial users at Rs 30 per unit. This adjustment aims to make electricity more affordable for the average consumer.

Income Tax Reduction: He advocated reducing the income tax rate for salaried individuals to 15%, providing financial relief to a significant portion of the workforce.

Zero-Rated Export Industry: Emphasizing the importance of the export industry as a critical driver for foreign exchange earnings, Dr. Ejaz proposed a "No Tax No Refund" policy, making the sector zero-rated for sales tax. This approach would eliminate income tax deductions at the time of exports, leveraging the existing SRO 1125 framework.

Dr. Ejaz also called for the establishment of a Task Force to develop a comprehensive 10-year Industrial and Export Policy. His strategic vision focuses on job creation, revitalising the manufacturing sector, and achieving export-led growth.

He believes this approach can enable Pakistan to repay its $130 billion foreign debt through domestic manufacturing, export earnings, and foreign direct investments rather than relying on external borrowings.

"Pakistan's inflation and policy rates remain among the highest, underscoring the need for strategic fiscal management," Dr. Ejaz stated.

He emphasised that as the world's fifth most populous country, Pakistan must adopt visionary leadership and strategic planning to transform into one of the largest global economies.

Dr. Ejaz concluded that implementing these recommendations could reshape Pakistan's economic landscape, driving prosperity and growth for the nation.

The former minister's call for reform underscores the urgent need for strategic fiscal management to foster economic development and stability in Pakistan.

Source: The Express Tribune

 

[FearlessRoar]

Govt eyes Rs450b in tax via digital tracking​

In an effort to achieve this fiscal year's overambitious tax target, the government has decided to collect Rs450 billion through enforcement measures by aiming to digitally capture Rs48 trillion in services sector supplies over the next three months.

Prime Minister Shehbaz Sharif has endorsed the Federal Board of Revenue's (FBR) plan this week, which is now crucial to achieving the FY2024-25 annual tax target of Rs12.97 trillion, according to government sources.

The PM was briefed that without implementing new enforcement measures, the Rs12.97 trillion annual target would be unachievable. He has given the go-ahead to aggressively implement the plan by expanding the Point of Sale (POS) initiative to various sectors of the economy.

These enforcement measures include collecting at least Rs50 billion from traders and Rs30 billion through the upward revision of property valuations.

The POS initiative, which has been under implementation for years, is now aimed at fully capturing the Rs47.5 trillion in sales being made by 10 major sectors over the next three months. These sectors include wholesale and retail, transport services, financial services, government services, real estate, construction, utilities, mining, health, education, and hospitality services.

Of the Rs47.5 trillion, more than halfRs20 trillionis said to come from the wholesale and retail sector.

Successive governments have spent hundreds of millions of rupees, and shoppers pay Rs1 on every shopping receipt under the POS scheme.

For now, the premier has ruled out the possibility of introducing a mini-budget, despite the tax machinery facing a significant revenue shortfall for the July-September quarter of this fiscal year. The FBR has so far collected Rs500 billion this month, against the requirement of Rs1.2 trillion, with only one week left.

The coalition government had agreed with the International Monetary Fund (IMF) to meet the Rs12.97 trillion target this year as part of the loan conditions. The FBR informed the PM that achieving the revenue targets would require additional measures beyond policy changes and autonomous growth in collections.

PM Sharif was told that the revenue impact of the new taxes imposed in the budget was Rs1.345 trillion. The FBR hopes that inflation and real economic growth will bring in another Rs1.9 trillion. This leaves the FBR with Rs450 billion that it aims to collect through enforcement measures.

The IMF board is scheduled to meet on September 25th to approve Pakistan's request for a $7 billion loan package. Finance Minister Muhammad Aurangzeb is expected to meet the top management of the IMF on the sidelines of the United Nations General Assembly session. The finance minister is travelling with the PM to the United States.

Sources said the Rs1.9 trillion autonomous growth in collections depends on achieving at least 3% GDP growth this year and 3.5% growth in large-scale manufacturing.

The FBR has also estimated Rs1.9 trillion in collections based on an annual inflation rate of 12.9% and 17% real growth in imports. If the inflation rate falls below this projection and imports remain low, the FBR will need to collect more than Rs450 billion through enforcement measures.

The FBR chairman believes that with the implementation of the new transformation plan, primarily through digital tracking and the POS initiative, the machinery can generate more than Rs450 billion this fiscal year. The plan also includes enhancing collections by targeting both compliant taxpayers and non-filers of income tax returns.

According to the briefing to the PM, the FBR achieved only a 6% increase in collections after adjusting for the impact of inflation for the 2016-18 period, and only 2% for 2018-24, reflecting its poor performance. Furthermore, the FBR's inflation-adjusted and real GDP growth-adjusted increase in collections was just 1% in the 2016-18 period and a negative 0.3% for 2018-24.

The FBR intends to go after compliant taxpayers by restricting them from withdrawing more than Rs30 million in cash annually. Those filers of income tax returns who claim more than Rs10 million in income will be allowed to buy only cars, but they must explain the source of income before purchasing a plot.

Filers with incomes below Rs10 million will need to provide explanations before purchasing a car, plot, or investing in securities and mutual funds.

The PM has approved the plan to target Pakistan's top 5% of the workforce, where the FBR believes Rs1.6 trillion in uncollected money is parked. PM Sharif was informed that the top 1% has an average annual income of Rs13.2 million. The wealthiest workforce paid Rs500 billion in taxes last year, and the FBR believes it can collect an additional Rs1.2 trillion.

Sharif has also approved freezing the bank accounts of unregistered manufacturers and wholesalers with annual turnovers above Rs250 million. This threshold for retailers is set at Rs100 million.

The FBR will have the authority to appoint receivers to confiscate the assets of unregistered manufacturers and wholesalers. It has also expanded the definition of tier-I retailers to include high-end luxury goods, electronic appliances, imported tiles, jewellers, shops with annual turnovers greater than Rs250 million, and those in posh areas.

In addition to the POS initiative, the FBR has received the PM's approval to track goods in the manufacturing sector. So far, it has primarily tracked goods in the chemicals, fertiliser, and pharmaceutical sectors.

There is also a plan to digitally track petroleum products within the next year, with plans to target the textile and beverages sectors in the next six months.

Govt eyes Rs450b in tax via digital tracking | The Express Tribune

PM endorses FBR's plan to expand POS system, enforce new measures to capture Rs48tr

tribune.com.pk

 

[Barragan]

End corruption and stop being america's puppet

Easy solution.

 

[FearlessRoar]

End corruption and stop being america's puppet

Easy solution.

The economic situation in Pakistan is dire and getting worse by the day. For decades, our leaders have made choices that have led us down this path, relying on foreign aid and short-term fixes instead of building a strong economy from the ground up.

We've seen how past regimes tied our economy to the whims of the U.S and when those ties weakened, so did our economy. Now, with growing debts and high inflation, ordinary people are feeling the squeeze. The current leadership seems more focused on maintaining power than on actually solving these problems.

We need a fresh approach that addresses these deep-rooted issues and prioritizes sustainable growth. The time for real change is now, but it requires vision and commitment from our leaders. Otherwise, we risk falling deeper into this crisis with no way out.

How can we break this cycle?

 

[JaDed]

End corruption and stop being america's puppet

Easy solution.

Skorea is USa’s puppet too so is Japan, why are they so good?

Corruption is everywhere even in Skorea and Japan.

 

[DeadlyVenom]

Not sure about what policies can be implemented to improve Pakistan's economy to create high value exports or if it will even happen.

But if Pakistanis feel that is unlikely, they should voluntarily stop having more than 1 child.

Considering your high fertility rates and population projections your state of economy , this will be an even bigger disaster.

You want to stop the one thing the majority of the population are good at?

 

[Saima Zafar]

One powerful way to help propel Pakistan out of its economic crisis is by boosting property investment, which can drive substantial growth across multiple sectors. Real estate development creates jobs, enhances infrastructure, and increases demand for local materials, which together strengthen the economy and stabilize markets. Encouraging both local and foreign investment in property, especially in emerging cities and residential sectors, can provide a much-needed stimulus, increasing the government’s tax base and encouraging urbanization. By fostering a positive investment climate and simplifying regulatory processes, Pakistan can leverage its real estate sector as a reliable growth engine, paving the way toward economic stability and resilience.

 

[The Bald Eagle]

Just let investors live, More than 10 years and still no considerable progress in CPEC. Even SEZs conditions deplorable.

 

[FearlessRoar]

Govt to bar non-tax payers from opening bank accounts

According to the proposed amendment, non-tax payers will be barred from opening bank accounts, purchasing vehicles above 800cc, and buying property above a certain limit.

Additionally, non-tax payers will not be allowed to make transactions above a certain threshold, and their bank accounts will be frozen if they fail to register for sales tax within two days.

The Federal Board of Revenue (FBR) will also have the authority to freeze the accounts of individuals who fail to comply with tax regulations.

Moreover, non-filer will be allowed to buy Rickshaw, motorcycle and tractor whereas parents, children upto 25-year-old, wife of a filer will also be considered filers.

Earlier, Federal Minister for Finance, Muhammad Aurangzeb said the number of new filers increased in Pakistan in FY2024.

Addressing concerns about tax collection, Aurangzeb stated that the number of tax filers doubled compared to last year, reaching 3.2 million from 1.6 million.

He further announced that 723,000 new filers joined the tax net this year, adding that non-filers will be restricted from purchasing vehicles and property.

However, the FBR officers held tax administration and policies responsible for the shortfall in the tax collection target.

In a statement, the Inland Revenue Service Officers Association (IRSOA) rejected the impression of officers lacking in collecting tax.

The Inland Revenue Service Officers Association also criticised the FBR’s transformation plan and termed it a mere show piece that has caused discontent among tax officials.

The statement said that 80% of junior field tax officers have the lowest salaries and many lack access to transport, fuel, and residential facilities.

Govt to bar non-tax payers from opening bank accounts

ISLAMABAD: The government has announced plans to tighten the noose around non-tax payers, with a new amendment bill presented in the National Assembly,

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