- Trust deficit between business community and Federal Board of Revenue (FBR) needs to be bridged to improve tax collection
- Dearth of right talent one of the biggest impediments in the way to our growth potential
- Lack of on-ground support by professionals for 95,000 businesses and over 5m potential tax filers remain a challenge to maintain the required level of compliance
- Contradicting growth forecasts by the Finance Ministry and Planning Commission hamper investor confidence
- Growth targets and development budget not consistent with our installed energy capacity, infrastructure projects committed and objectives of industrialisation phase under China–Pakistan Economic Corridor (CPEC)
- Increase the size of the economy and an average 7% annual GDP growth rate is required to catch up with neighbouring economies
- Five-Year plan (2018-23) to be publically debated and should serve as the base for a charter of economy
The Association of Chartered Certified Accountants (ACCA) Pakistan organised a high profile post budget conversation ‘The Budget 2019–20: Opportunities and Challenges for Economic Reforms’ in Islamabad to provide a platform to business community and thought leaders to propose key economic reforms and share their feedback and recommendations on the proposed Finance Bill 2019-20.
The conversation was opened by Sajjeed Aslam, head of ACCA Pakistan. In his speech, he summarised the budget recommendations submitted by the global body for professional accountants and shared actionable recommendations toward making the current taxation regimen more transparent, efficient and progressive to meet country’s economic and social needs. He emphasised that the focus should be on human development and progress in the country and not merely on improving a few macroeconomic indicators. He stressed on the importance of professionalism and ethics for talent in the public sector.
“Budget is a subset of economy. You can never have a good budget unless you correct the flaws in your economic model and bring radical reforms. Economies are built by the people, without investing in the human resource, prosperity can never be achieved.” – Sajjeed Aslam
The event featured an insightful panel discussion with contributions from prominent policy makers, senior bureaucrats, tax consultants, influential thought leaders and senior ACCA members. Notable speakers included Dr Abid Qaiyum Suleri, Executive Director, SDPI, Zia-Ul-Mustafa, President, ICMA Pakistan, Salman Amin FCCA, Senior Energy Professional, Hassan Daud Butt, Project Director – CPEC, Zafar-ul-Hassan, Chief Macro Economist, Ministry of Planning, Development and Reforms and Omer Zaheer Meer FCCA, Chairman, ACCA Pakistan Member Network Panel.
“To solve our circular debt crisis, we need to work on improving the performance of our public sector enterprises and should encourage those who’re buying dollars to invest in conventional savings and investment products. Also, rationalisation of slabs in the gas tariffs is necessary.” – Dr Abid Qaiyum Suleri
The Conversation Leaders commented that to truly solve Pakistan’s current economic woes and to meet its social challenges, it’s imperative to work on increasing the size of the economy and to aim at a higher average annual GDP growth rate compared to what is predicted in the budget document. The panel also pointed out that the Finance Ministry and the Planning Commission of Pakistan are working on two different GDP growth forecasts and both are approved by the Prime Minister’s office. Moreover, the twelfth Five-Year plan (2018-23) should be publically debated and should serve as the base for a charter of economy with an across-the-board political consensus.
The speakers agreed that the underlying philosophy of the proposed budget is a right step toward a documented economy and broadening of the tax base. There was a general consensus that tax collection of over PKR 5.5 trillion is a realistic reflection of the potential even within current economic scenario. However, in its current form, it may not appear to pass the test of fair and equitable tenants of taxation on account of minimum tax regime.
The twin fiscal deficit will continue to challenge us, and may need innovative and bold steps by business community and the government to truly drive an inclusive and accelerated growth. The current growth targets and development budget are not consistent with our installed energy capacity, infrastructure projects committed and objectives of industrialisation phase under China–Pakistan Economic Corridor (CPEC).
Participants of the conversation urged the government and the Federal Board of Revenue (FBR) to take concrete steps toward the simplification of the tax filing system by moving to automation. Advocacy programmes at grass root level to create support and awareness for government’s initiatives should also be explored. It was also expressed that the current monetary policy is a hurdle in the way of industrialisation and growth. It was agreed that the trust deficit between business community and Federal Board of Revenue (FBR) needs to be bridged to improve tax collection.
It was concluded that Pakistan has a deficit of trained professional accountants and legal practitioners to support over 95,000 businesses and potential 5 million tax filers to help them with developing an ethical mind-set and full compliance with the tax regulations to support country’s economic progress. The dearth of right talent is one of the biggest impediments in the way to achieving our growth potential.
The event was attended by a large number of business leaders and professional accountants and offered them a good opportunity for networking and knowledge sharing.