All the economic indicators show that the country is coming out of its years of recession as signs of improvement are visible everywhere. However, as we have mentioned in an earlier editorial, the nation needs a stimulant plan to boost trade and industrial activities in the country. An official of the International Monetary Fund (IMF) has also pointed out that Pakistan’s economy is improving by prudent monetary and fiscal policies, strong capital inflows, robust remittances and lower international oil prices.
However, there is a long way to go on the road of economic prosperity and reach the destination. The country needs both micro and macroeconomic stability, strong public finances and rebuilding of foreign exchange buffers to brave any aftershock. Though inflation is declining and economic growth is gaining ground, as the IMF official pointed out, the crisis risks still existed though receded to some extent.It is the time for the policymakers to consolidate the gains of the current economic and financial improvement and try their best to achieve higher and sustainable and inclusive economic growth.It is not denying the fact that the government tax system is complex and confused. No one wants to pay taxes, but there are businessmen who want to pay taxes but they don’t want to play in the hands of the black sheep. It will be, therefore, plausible to overhaul the tax machinery.Pinpointing the black sheep within the tax machinery is very easy. The lifestyle of the corrupt elements, details of their air travel and the level of school where their children study are the best indicators to ascertain if their income is compatible with their expenditures or not. The FBR has already started proceedings against corrupt elements within the department. However, there is further need to bolster government revenues through broadening of the tax base and improving compliance.There is a need to generate more revenue resources,reduce public debt and increase spending in public investment, health and education.
The country’s resilience will have to be strengthened and build-up of international reserves and special concentration should be given priority to enhanceexports. According to the IMF official, stemming the accumulation of arrears and addressing long-standing imbalances in the energy sector, restructuring and privatizing of the public sector enterprises, moving ahead with investment climate and trade policy reforms, and continuing with financial sector reforms to improve resilience and financial inclusion should be the key priorities areas of the government policies. The reforms should not affect the already vulnerable segments of society.
