KARACHI: Dr Shamshad Akhtar, the former caretaker finance minister, has said increasing the flow of taxes and other income into government treasuries was critical to improving tax-to-GDP ratio, maintaining macroeconomic stability, and sustained economic growth.
“The tax-to-GDP ratio in our country is around 10-11 percent in contrast to the developing economies, where this ratio averages at 21 percent,” Akhtar said speaking at an event on Financial Reform for Economic Development (FRED) Asia.
The seminar was jointly organised by the Institute of Chartered Accountants of Pakistan (ICAP) and Institute of Cost Management Accountants of Pakistan (ICMAP). Dr Akhtar said there was a dire need of increasing Domestic Resource Mobilisation (DMR), which was in effect the generation of savings from local resources and their allocation to the economically and socially productive investments.
“The economy could be strengthened through DMR, for which private sector could play an important role and it further requires encouraging public-private partnership to resolve key economic issues,” she added.
The former caretaker finance minister said a board for public–private partnership was constituted at the finance ministry in order to encourage private sector investment. “This board should be activated,” she added.
She said investment should be encouraged at microeconomic level. “The economy can be improved through short-term DMR and with the help of financial institutions,” she said.
