According to newspaper reports, Commerce Minister Engineer Khurram Dastgir has held the ‘irresponsible’ import tariffs and policies of the tax collecting authorities responsible for economic woes of the country. He said that the ever increasing tariffs and tax regime are neutralizing the positive impacts of the economy. The pathetic part of the situation is that the country cannot afford to lower its tariffs once it is accustomed to collect money through duties and taxes. According to the minister, the government should have to realise that customs duties and tariffs cannot be adopted as a source of income. The tax collection authorities should have to resolve fiscal issues, ensure stable exchange rates and solve the refund claims problem besides rationalizing the tax rates on various products. The issue of refunds claims is serious and it needs urgent government attention as the business community has to wait for months to get the money. It is yet to be seen the finance minister’s promise that the government will clear all the refunds claims by September 30, 2016
Nevertheless, this is the first time a government minister has criticized the irrational policies through which taxes and duties are imposed. The story does not end here as the country’s tax system is complex and it is pointed out not only by the bewildered taxpayers, but also by the international financial institutions.The tax officials have their own limitations and cannot take independent decisions. In the federal budget,the government announced zero rating for five sectors in line with the promise made by Prime Minister Nawaz Sharif in February 2016. However, it will be implemented from July 1, 2016 and the sectors would be out of the bounds of refunds circle. The business community believes the refunds claims of up Rs300 billion are pending, but the department concerned claims the amount is around Rs85 billion.
The time has come the government should overhaul the financial, trade and industrial sectors of the economy and bring procedural changes in the tax system. The whole world is looking towards economic progress of Pakistan, especially after getting GSP plus status from the European Union and emerging market status by MSCI. Apart from the corridor project, billions of dollars investment is expected from the private sector of China and the world financial institutions. It is hoped that the government will rationalize the tax rates and simplify the tax procedure. The minister holds an important ministerial slot and can convince the prime minister and his colleagues to take steps to change the direction of the economy. The only thing needed to do is to put our own house in order.