Zarb-e-Azb helped revive economy: Haroon

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The government has said that the upcoming budget would be pro-growth and pro-industry and warned tax non-filers of severe penalties from the next fiscal year. Speaking at a day-long pre-budget seminar organised by COMSATS here on Tuesday Prime Minister’s Special Assistant on Revenue Haroon Akhtar said the government would encourage investment in the country to boost growth.

He said the government has got the record of all those who are paying very nominal or no tax but are living a luxurious life and are frequent travellers abroad.

He said there is an attitude of not paying taxes as even big tax payers are also evading tax but their percentage is 0.1 percent. Haroon Akhtar also claimed that the government was able to reduce the incidences of smuggling through Balochistan by 80 percent.

He added that the government was hopeful that an increase in tax-to-GDP ratio in the coming years would help increase development activities.

“There has been an 11 percent growth in electricity,” he said, adding that growth in large scale manufacturing (LSM) has started picking up on the back of increase in production of auto, cement and fertilisers.

Special Assistant to Prime Minister stated that the China-Pakistan Economic Corridor (CPEC) is a reality and will change the future course of Pakistan.

Akhtar said that when the present government came to power, all the economic indicators were deteriorating but the Zarb-e-Azb operation led to revival of economic indicators and now the inflation is as low as around 5.2 per cent, interest rate to 6.5 percent; and GDP growth is expected to be around 5 per cent.

However, Akhtar’s claim of bringing down fiscal deficit from 8.8 percent to 4.4 percent was strongly contested by former advisor to Finance Ministry Dr Aashfaque Hasan Khan. Dr Ashfaque said the figure was achieved by: (i) holding back refund and commercial entities were made to pay income tax in advance; (ii) by not releasing resources to the provinces; (iii) giving pervasive incentives to the provinces against spending which led to deterioration in social indicators.

Additionally , he added, those items which were historically treated as surcharges have been renamed as non-tax revenue as well as not showing circular debt in the budget and if still the desired number was not achieved the head of fiscal discrepancy was used to achieve the desired figure.

He also spoke in detail about the state of growing debt of the country and how much was contributed from 2008 to 2015. According to him, the country will be unable to meet the growing gap in balance of payment from 2018 onwards due to significant increase in debt serving because of commercial borrowings by the government.

He said the government flaws and absence of quality fiscal adjustments have created immense social problems as spending on the social sector has been squeezed owing to massive cuts in development budget to achieve agreed fiscal deficit target with the International Monetary Fund (IMF) and termed the reviews under $6.64 billion Extended Fund Facility as political reviews and not economic reviews given the number of waivers granted to Pakistan.

Source: Business Recorder