Need to double tax-to-GDP ratio, says Shaukat Tarin
ISLAMABAD (PEN0: Advisor to Prime Minister on Finance and Revenue Shaukat Tarin said on Monday that Pakistan needs to increase its tax-to-GDP ratio in order to achieve economic development.
Addressing a ceremony in Islamabad, Tarin said that he has told the business community that they have to pay taxes, however, they will be facilitated and will not face harassment from the Federal Board of Revenue (FBR).
“No one will harass the taxpayers, but everyone has to pay taxes,” he said.
The advisor informed that they have got all relevant data such as billing information, bank account statements, traveling expenses, “and using artificial intelligence, we will be able to estimate the incomes of persons, which will be 88% accurate”.
He said that in order to grow at 6-8%, the tax-to-GDP ratio cannot remain at 9%.
“In order to achieve 6-8% growth, we need to double our tax to GDP ratio to 20%,” he said.
Talking about the Kamyab Pakistan programme, the advisor said that big commercial banks are not trained to disburse small loans.
“They have a number of prerequisites such as collateral, documentation, etc. therefore, we have developed a formula under which funds will be taken from commercial banks, and microfinance banks and NGOs will disburse the funds,” he said.
He said that under the Kamyab Pakistan programme, which will cater to 4 million families or 30 million persons, agricultural loans will be provided, for people residing in urban areas each family will receive Rs0.5 million worth of interest-free loans.
“We also said that there is a shortage of housing, thus the government will give housing loans up to Rs2.7 million on low mark-up, and Sehat Card is already in the offing, so it is a complete package,” added the advisor.
Talking about the economy, the advisor said that the government is focused on taking the economy forward. “There is a lot of focus on agriculture,” said the advisor, who added that although the agriculture sector constitutes 19.5% of Pakistan’s economy, it feeds industries like ginning and husking, which further support larger industries.
He further said that we need to focus on agriculture and Small Medium Enterprises (SME), which only receive 6-7% financing.
“We need to pay attention to it, as there are over four million SMEs in Pakistan, however, there are only 170,000 loans for this sector,” he said
Talking about the IT sector, Tarin said that there is a huge opportunity for the youth amid rising demand globally.
“Our vision is to regain our lost economic glory so that we are not dependent on others including international lenders,” said Tarin.