ISLAMABAD: The Pakistan Economy Watch (PEW) on Sunday appreciated efforts to regulate realty market, which would help government raise billions of rupees and increase the size of documented economy.
“The decision is being resisted by a majority of business community which amounts to help tax cheats as it will convert a good part of the informal economy to the formal one,” said a PEW statement. PEW President Dr Murtaza Mughal said Pakistan’s real estate sector had become a safe heaven for corrupt bureaucrats, politicians, criminals, terror financing and crook businessmen. He said formal economy was shrinking as compared to informal one and now it was bigger than the former.
Dr Mughal said that the decision of the finance minister pertaining to real estate sector would help increase tax-to-GDP ratio, which was one of the lowest in the world; thus pushing government to beg for survival. A study estimated that the underground economy was 54.6 percent to 62.8 percent of the GDP and expanding at the rate of nine percent a year. According to a report, informal businesses enjoy cost advantage by avoiding taxes and regulatory obligations, which allows them to remain competitive despite low productivity.
“The informal segment of the economy does not pay direct taxes which limits the impact of policies and weakens resource base of the state. Dr Mughal called for making an end to culture of amnesty schemes as each scheme was declared to be the best, but the count kept on growing.
