Parliamentarians’ roundtable meeting on taxation

ISLAMABAD: Research and Advocacy for the Advancement of Allied Reforms (RAFTAAR) hosted a parliamentarians’ roundtable meeting in Islamabad. The meeting was attended by political party representatives from various political parties.

The roundtable meeting brought together representatives from parliament, the Senate and RAFTAAR’s advisory panel to discuss the severity of the tax crisis and the role of parliament in solving it. RAFTAAR aims to support parliamentarians in establishing a consensus for tax reforms as well as increasing motivation within the parliament to hold the government more accountable on tax policy and tax administration.

The opening remarks were made by Dr Salman Shah, Former Finance Minister of Pakistan. Highlighting the barriers to economic growth in Pakistan, he said, “Pakistan’s economy is not growing the way it should to fulfill the needs of the nation. We all realize this is a war economy. We need high growth in the economy to sustain the war effort. On the other hand we have another war; the war on unemployment. Almost 60% of the population is youth and they need around 3 million jobs a year. For that purpose the economy needs to grow at a very high rate – around 8% or more.”

Improvements in the tax system are crucial for enabling growth. Dr Shah added that “Growth needs to be driven by investment. However [the current] tax system is hurting the investment climate and the ability of the government to generate resources for national development.” He also stated that “the parliament has to be the architect of our overarching tax policies and tax institutional reforms.”

Sakib Sherani, Former Principal Economic Adviser to the Government of Pakistan, highlighted the existential nature of the tax crisis and emphasized that this should not be underestimated. He stated that “the current tax system is mortgaging the future”. Pakistan’s spending on education is 2.7% of GDP and on health is 0.7%. That ranks Pakistan 147th and 187th (out of 188) in the world respectively.

Sherani outlined required reforms in tax policy, tax administration and tax culture and stressed that “all income, irrespective of its source, above the threshold should be subject to tax.”

MNA Qaiser Sheikh, Chairman of the Finance Committee of the National Assembly welcomed the opportunity to discuss the important issue of taxation. He recognised current issues and said that “In different periods, different regions [have] experienced more growth and development. Presently our region is experiencing the highest growth – except for Pakistan. The potential is there but we are unable to collect proper revenues and create incentives for the [domestic] industrial sector or for Foreign Direct Investment.”

Afrasiab Khattak, Senior Leader from the Awami National Party (ANP), concluded by remarking that “We have to consistently and patiently work to overcome the lethargies and roadblocks that we have in the system. This is an issue that is over and above partisan politics.”

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