A Japanese envoy has recently pinpointed various issues concerning the economy of Pakistan and other pressing issues. According to him, the economy is on the path of recovery and is expected to grow by five percent during the current fiscal year and taking this advantage the government should try to create a balance between the economic growth and social stability. He also pointed out that there is high number of salaried class in Pakistan as well as varied standards of living. It is hard to keep balance between economic growth and social sectors but there is need to pay attention to education, health and other social problems facing the nation.
No doubt the government has to enhance tax base, reduce debt size and modernize the economy through structural reforms and sustainable policies. As the volume of black money is increasing in the country, the policymakers have to use their minds to revitalize the economy in the given circumstances. It is the proven fact that corruption cannot be eliminated as all the efforts which are made so far in this regard ended in smoke. The volume of black money is equal to the volume of the actual economy in official record. However, the black money is growing with every passing day. According to experts, the volume of formal or documented economy is $250, which is better than many other countries in the region, but it is not at a satisfactory level. The government will have to work hard to devise a mechanism not only to reduce the scale of black money, but also improve tax collection system by enhancing tax net. Black money is the real problem of the country, but steps are required to prevent it from its flight to other countries. The government should have to take steps to keep the black money within the country by introducing business schemes.
Tough laws only enhance troubles as it is difficult to expect implementation of the government plans in a corrupt environment. The tax evaders use various methods to stay away from tax collecting authorities. The introduction of mechanism is the need of the hour to enhance tax base. There are thousands and thousands small industrial units which are out of the bounds of the tax net. It should be made mandatory for all the businesses, small or large, to register themselves with the relevant government departments and get the tax number. The agriculture sector counts 50 percent of the GDP but there is little hope it will ever come under the tax net. There is also a need to enhance tax-to-GDP ratio and reliance on the loans should be ended.
