Tax system encouraging evasion, discouraging compliance

Lahore: Chairman of the United International Group Mian Shahid on Sunday said agriculture, manufacturing and remittances are lifeline of the economy which should get extra attention in the upcoming budget.

Growth rate would remain below five percent unless these critical sectors are given due importance, he said.

Talking to patron Islamabad Chamber of Small Traders Shahid Rasheed Butt, he said that recent cut in the interest rate is good move but it can discourage depositors who are now getting five percent profit.

Five percent profit in presence of 4.5 percent inflation is enough to frustrate many to find other avenues for investment including foreign countries which must be contained, he said.

Mian Shahid said that SBP move may not go down well with the business community which has obtained Rs161 billion loans in the ongoing fiscal as compare to Rs292 billion last year.

He said that reduced lending also speaks of preferences and restraint observed by the commercial banks.

Some experts say that our tax system should be improved as it continue to encourage evasion, discourage compliance and has increased the size of undocumented economy form the documented economy.

Pakistan needs good governance, fiscal discipline and good economic planning to push growth rate to seven percent which is imperative to contain increasing unemployment which is fanning many social problems.