Broadening tax base better option than printing money

Lahore: Islamabad Women’s Chamber of Commerce and Industry (IWCCI) on Sunday lauded the government for showing true state of economy to the nation which has improved confidence of business community in their leadership.

The statement of Finance Minister Ishaq Dar that the government would have to look towards the IMF and other donors to start returning foreign debts calls for an urgent action, said Farida Rashid.

She said that former government damaged the economy, took 200 per cent loan of Pakistan’s quota and left Rs 500 billion circular debt unsettled, now the country will face a default if it failed to return three billion dollars to IMF during 2013-2014.

She asked the government to finalize a deal with IMF for a loan of five billion dollar minimum on urgent basis so that Pakistan can avert a default.

The current situation is result of the inaction of the previous government which signed the loan agreement with the IMF in 2008 but failed to reform the tax system, state corporations, energy sector, eliminate subsidies and bring down fiscal deficit to 4 per cent as promised during negotiations.

The indecision of former unpopular rulers has brought country on the brink again which cannot make it on its own, she noted.

Farida Rashid said that new IMF loan will restore the confidence of World Bank, ADB, and other donors to support Pakistan.

It will improve investment climate, result in continuity of policies, reduce flight of capital and relocation of industries and erosion of local currency to stabilize exchange rate.

Farida said that unlike former rulers, the incumbent government has decided to stop printing excessive currency and broaden the tax net which is a very positive development.

She said that government should think about the impression that it plans to burden masses through taxes while sparing wealthy.