LAHORE: Tax efforts are needed to be increased manifold, particularly by widening tax base and effective enforcement, said the State Bank of Pakistan first quarterly report of fiscal year 2015-16.
According to the report which titled ‘The State of Pakistan’s Economy’ was submitted to the Parliament Monday said, although budget deficit for first quarter was lower than the same period last year, tax collection could not post the required growth. It would be pertinent to mention here that with recent tax measures, the Federal Board of Revenue (FBR) taxes have shown a significant year on year growth of 16.8 percent in Jul-Nov of fiscal year 2015-16.
According to the SBP report, some improvements were already visible from the changes in key macroeconomic indicators during the first quarter of the year. Economic activity seems to be gearing up as large scale manufacturing recorded a noticeable increase over the last year.
Further, the current account deficit narrowed, which was comfortably financed by higher financial inflows; the country’s foreign exchange reserves recorded all time high levels, and were sufficient to finance import bill of seven months; fiscal deficit was reduced, along with a shift in its financing away from SBP; and inflation remained on low trajectory.
However, the report said notable improvements in the key macroeconomic indicators during the first quarter of the year can be observed; however, much needs to be done to ensure their sustainability.
The report states, ‘Taking comfort from visible improvement in macroeconomic environment, SBP initiated monetary easing in FY15, which continued during the first quarter of FY16. This policy stance was augmented by a pro-growth budget for FY16. In addition, marked improvement in security conditions, relatively better energy management, and persistently low global commodity prices, have positioned the economy to further improve on its performance going forward.”
