In a meeting of business executives, Finance Minister Ishaq Dar has once again sought help from the business community to broaden tax-base in the country as the dream of economic prosperity could not be achieved without increasing the tax revenue. According to him, the official machinery and institutions are trying their best to broaden tax net, but the business community should also play its due role in enhancing the tax revenues. The army has already launched an operation against militants in North Waziristan, costing Rs 44 billion to the national exchequer this year and another Rs 136 billion is likely to be spent next year on the anti-terror operation and rehabilitation of displaced persons. The government needs money and it gets it through taxes.
Obviously this government wants to enhance tax net and improve economy, but old methods are not beneficial any more. As Japan had transferred all its small industrial units to Malaysia, it is the time China is heading toward heavy industry and Pakistan can set up small industrial units in the country with the Chinese help. If the government wants to increase tax revenue, it has to multiply industrial activities. More industrial activities mean more production and more production means more revenue.
Mr Dar and his team are also part of the business community and understand its problems. Earlier, Federal Board of Revenue Chairman Tariq Baja had pointed out that there is not culture of tax compliance in the country. He is right as there are millions of businessmen in the country who are not registered with any government agency and causing losses to the tune of billions of rupees to the national exchequer by not paying any tax. To get rid of this problem, every business, small or large, should have a registration number. Documentation of the economy is necessary if the government wants to streamline the economic activities. However, undocumented economy is also beneficial for the country to some extent as it will not be affected from any global economic shock or recession as it happened in other parts of the world. A close interaction is also necessary with all stakeholders, including businessmen, traders, chambers of commerce and industries, business associations and others before devising any new tax policy in the country. Dar has asked the business executives to help the government promote tax culture in the country by encouraging individuals in their own ranks and files to pay taxes. But is also a fact that the tax system needs reforms.
